SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File number 0-3062
GUY F. ATKINSON COMPANY OF CALIFORNIA
(Exact name of registrant as specified in its charter)
STATE OF DELAWARE 94-1649018
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
1001 Bayhill Drive, San Bruno, California 94080
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 876-1000
Securities Registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
CAPITAL STOCK, without par value
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. Yes No X
As of January 31, 1995, the aggregate market value of the voting stock
held by nonaffiliates of the registrant was $66,299,854 based on closing
sale prices on the NASDAQ National Market System. This calculation does not
reflect a determination that certain persons are affiliates of the registrant
for any other purpose.
The number of shares of capital stock, without par value, outstanding as
of January 31, 1995 was 8,950,824.
Items 10, 11, 12 and 13 of Part III incorporate information by reference
from the definitive proxy statement for the Annual Meeting of Shareholders to
be held on April 19, 1995.
<PAGE>
PART I
Items 1 & 2. Business and Properties.
Guy F. Atkinson Company of California was incorporated in
California in 1967, as the successor in interest to Guy F.
Atkinson Company, a Nevada corporation organized in December
1934.
The Company operates worldwide providing full
construction services to markets for infrastructure, power
generation, industrial and commercial building, pulp and paper,
mining, metallurgical processing and water and wastewater
treatment. The Company also operates a small business involved
in the manufacture of heavy duty industrial intercoms, and it is
also developing a water and wastewater treatment business. The
Company previously operated businesses in automobile parts
manufacturing, distribution of industrial pipe, and oil and gas
exploration and production. These operations were sold in the
fourth quarter of 1994.
The Company's executive offices are located at 1001
Bayhill Drive, 2nd Floor, San Bruno, California 94066. The
telephone number is 415/876-1000.
Guy F. Atkinson Company of California (the parent
corporation), establishes general policy direction, and provides
planning and coordination, accounting and audit control, treasury
functions, insurance services, legal services, management
information systems, personnel administration, public relations,
and other management services for its operating divisions and
subsidiaries.
The Company's construction operations and activities are
best summarized through a discussion of its markets, construction
operations, and some of the projects in which the Company
participated in 1994.
Markets:
The Company competes for construction work in the public
and private sectors in the U.S., Canada and internationally. In
1994, the Company's construction revenues were approximately 40
percent from the public sector and 60 percent from the private
sector.
Competition within the construction industry is based
primarily on price, reputation for quality, experience,
reliability, and the financial strength of the contractor. The
markets served by the Company are competitive and require
substantial resources, in particular, highly skilled and
experienced technical personnel. Further, domestic construction
activity depends to a significant degree on the general state of
the U.S. economy and, more specifically, on the relevant market
industry segments and their economic condition and future
planning. As a result of economic changes within its markets,
the Company's level of work will vary year to year. By
diversifying its services to various markets and expanding the
international markets, the Company is able to moderate the
effects of fluctuations in its markets.
The Company sells its capabilities on the basis of price
using the bidding process, contract negotiation, or a combination
of both. It also sells its capabilities through additional
incremental services its markets may require, such as design and
engineering or turnkey packages with design, construction,
procurement, and advice on financial structure and sources.
While these services may be offered by the Company, more
typically they are offered through an alliance or in association
with other firms.
Projects are staffed by management supplied by the
Company and by hourly craft personnel mostly obtained in a local
labor market. Trained hourly employees are normally available in
the vicinity of the Company's projects. However, substantial
training must be undertaken in those places where experienced
labor is not available.
The Company frequently participates in joint ventures
with other contractors to share risks and combine financial,
technical, and other resources. When the Company undertakes work
in a joint venture it may act as sponsor or lead contractor, in
which case it manages the work. If not the sponsor, the
Company's participation is normally limited to assistance in
estimating and policy management and sharing on a pro-rata basis
the financial risks and rewards of the work. In 1994, 24 percent
of the Company's construction revenue was derived from work
performed in joint ventures.
The Company performs its construction work under prime
contracts that take various forms. These contractual
arrangements include fixed-unit or lump-sum price, cost-reimbursable,
fixed or percentage fee, or maximum price contracts. Contracts are
either competitively bid and awarded or individually negotiated. In
performing as a general contractor, the Company undertakes the planning
and scheduling of projects, marshals the required personnel, procures
materials, awards and administers subcontracts, and directs and manages the
construction project. In the case of a construction management
contract, the Company monitors and coordinates the progress of
the work and assists the owner where other prime contractors are
employed to build the project. In a growing part of the
industry, it acts as a turnkey contractor taking responsibility
for engineering design, construction, and procurement of
equipment ("EPC"), and provides other operating services from
inception through delivery of a completed project.
Construction Operations:
Through four construction divisions and subsidiaries in
the U.S. and Canada, Atkinson provides full service worldwide
construction and related engineering services to heavy civil,
industrial, commercial, energy, natural resources, utility, and
government clients. The Company generally competes for work
that is complex in engineering and significant in the scope of
services required. Its acquisition of work is facilitated by its
excellent reputation, diversity of services, technical expertise,
and worldwide geographic coverage.
Atkinson Construction, headquartered in San Bruno,
California, is one of the largest U.S. contractors of heavy civil
projects, serving both public and private sectors, working not
only in the U.S., but also internationally. The division
performs general construction services for hydroelectric power
development, bridges, highways, dams, water and wastewater
treatment facilities, and tunnels and shafts for power,
transportation, and water conveyance.
The Company's primary domestic industrial construction
division, Walsh Construction Company, with headquarters in
Trumbull, Connecticut, is a major provider of design-construct
services to both the power and building markets. Its power
experience includes geothermal and cogeneration development,
using fuels ranging from gas and coal to municipal solid waste
and biomass. Its buildings are equally diverse, embracing
commercial, industrial, institutional and R&D laboratory
facilities.
The Company services Canada's industrial construction
market through its Commonwealth Construction Company division,
which has its head office in Burnaby, British Columbia.
Commonwealth serves a variety of industrial markets including
pulp and paper, mining, metallurgical processing, water and waste
treatment, and energy throughout the Americas and Southeast Asia.
Commonwealth is also active in markets for power generation and
process facilities for oil and gas, chemical and petrochemical,
as well as, general industrial construction.
Through Monterey Construction Company, operating from San
Bruno, California, the Company provides merit-shop services to
heavy civil and infrastructure construction markets.
The following is a discussion of the types of
construction in which the Company is involved and a partial
listing of 1994 construction projects to illustrate the breadth
of its capabilities and services.
Heavy Civil
Heavy civil work provides a significant portion of the
Company's revenues. Projects requiring a high degree of
organization and complex engineering are well-matched to the
Company's long standing expertise. The Company's heavy civil
work includes the building of dams, hydroelectric developments,
bridges, locks, tunnels, shafts, highways, and other large
infrastructure-related projects.
The Company believes that work within the public sector
for infrastructure development and rehabilitation, major
transportation projects, power development, water and wastewater
treatment, locks and dams, and underground construction will
continue to be important markets for it in the 1990s. The
Company performs this type of work throughout the U.S., Canada,
and internationally.
The Company continued its work in 1994 as a participant
of a joint venture in Venezuela on the Macagua II hydroelectric
facility, a major power development for the Venezuelan
government.
In 1994, the Company was at work on or completed a number
of intrastructure projects located in various geographic
locations. Exemplifying its work in this market, the Company
worked on or completed projects in the State of Washington for a
bridge replacement, a highway widening project, a highway project
entailing a road realignment and replacement of bridges.
In California, the Company performed a retrofit of an
earthquake damaged freeway in San Francisco and repaired an
earthquake damaged bridge in Los Angeles. In Nevada, the Company
was part of a joint venture that finished construction on a
runway extension at McCarran International Airport, and in
Arizona, has been working on the rehabilitation at a large dam
structure.
The Company has broad experience in underground
construction, making it a prime competitor for work related to
power generation, transportation, water supply, and mining. In
1994, the Company was active on several joint venture projects in
Boston, Massachusetts, two of which involved underground or
tunneling construction. One project entails construction of two
cut-and-cover tunnels over a depressed roadway and the second
involves construction of an effluent outfall tunnel. The Company
is also part of a joint venture handling excess excavated and
dredged soil and sediment materials from other projects in the
Boston area with placement on a island for future development of
a park.
In 1994, the Company worked on or completed the following
other underground projects. As the sponsor of a joint venture,
the Company constructed a new vehicular tunnel at the airport in
Las Vegas, Nevada, and in Pennsylvania the Company has been
working on a contract to enlarge existing railroad tunnels for
Conrail.
Industrial
Typically, the Company competes for work ranging from
modernization to new construction of industrial facilities, power
generating stations, installation of mineral processing
facilities, commercial and institutional building construction,
academic centers, research facilities, and chemical and
manufacturing plants. Its industrial construction companies
provide feasibility studies, design/build services, value-engineering,
construction management information systems, general construction services,
construction management, start-up and operation services as the markets may
require.
The Company's industrial construction segment serves a
broad range of markets and clients. This segment is very
competitive, serviced by numerous well-established and highly
competent contractors. These industrial markets are also driven
by their own set of strategic and economic market factors. Some
of these factors can translate into diminished capital spending
for construction programs and/or delays in planned projects. For
example, recent construction activity within the resources
development industries has emphasized modernization and upgrading
of facilities and compliance with environmental standards. In
response, the Company promotes its record of reliable
performance, quality, and its capabilities in scheduling and cost
control as integral services.
In 1994, the Company was active in the building market as
work continued on the interior renovation of buildings at the
City College of New York on behalf of the Dormitory Authority of
New York. In Oakland, California, construction was completed on
two projects; a new Federal building for the General Services
Administration and an addition to Children's Hospital. In La
Jolla, California, construction began on a 20-story, 238-unit
residential retirement community.
In recent years, the Company has contracted for a
significant amount of work for cogeneration and other types of
industrial power generating facilities. Exemplifying this, are
a 40-megawatt cogeneration powerplant in New York for which the
Company provided engineering, procurement, and construction
services and a 41-megawatt waste-to-energy facility in New Jersey
that was completed in 1994. During the year, construction
continued on a design/build 49.5-megawatt cogeneration plant in
Montana. The Company is presently performing feasibility studies
for a proposed cogeneration facility in California.
Construction has started on a new central utilities plant on the
San Francisco medical campus of the University of California.
Due to the types of construction the Company undertakes,
its work is, to some extent, seasonal. Typically, less can be
accomplished in winter than in other seasons. Accordingly, the
Company plans construction to mitigate, where possible, the
effects of weather.
Revenues from contracts with the U.S. government,
principally for construction services, provided revenues of $21.2
million in 1994, equal to 5 percent of the Company's consolidated
revenues. Those contracts are terminable at the election of the
U.S. government.
In certain instances, the Company has guaranteed facility
completion by a scheduled acceptance date and/or achievement of
certain acceptance and performance testing levels. Failure to
meet any such schedule or performance requirements could result
in significant additional costs, thus eroding expected project
profit margins.
The Company also owns substantial quantities of
construction equipment located at the sites of its projects or at
owned or leased storage yards. Raw materials required for the
Company's construction projects are normally available in the
open market for purchase or lease and may be obtained from local
sources.
Working Capital:
The Company often obtains working capital for its
construction projects by pricing mechanisms that provide capital
early in the project for mobilization and start-up costs.
However, contract terms may also necessitate, in some cases, an
infusion of working capital from the Company from time to time
during the course of construction. In addition, working capital
may be provided from internal Company sources or outside
borrowing to finance the cost of work for which pricing
negotiations are incomplete or responsibility is disputed by the
owner. It is also customary in the construction industry for
owners to withhold sums as retention until the work is completed.
This retention can range from 5 percent to 15 percent of the
contract price.
Backlog:
The approximate value of the Company's firm backlog of
contracts as of December 31, 1994 and December 31, 1993 was $310
million and $686 million, respectively. The reduction in backlog
from 1993 to 1994 of $376 million reflects approximately $293
million attributable to the removal from backlog of an awarded
but long-delayed industrial construction contract due to the
uncertainty surrounding the project. The Company has obtained
new construction awards totaling $176 million in the first two
months of 1995.
The dollar value of the backlog is not necessarily
indicative of the future earnings of the Company related to the
performance of such work. Although backlog represents only
business that is considered to be firm, there can be no assurance
that cancellations or adjustments in the scope of work will not
occur.
Other Operations:
The Company's construction-related operations include
Atkinson Dynamics Company, based in South San Francisco,
California, which designs, manufactures, and repairs heavy-duty,
extreme-service industrial intercoms. These intercoms are used
primarily by general industrial and manufacturing companies, and
government and public safety agencies.
The Company is also developing a water and wastewater
treatment business, International Water Solutions Corp., based in
Burnaby, British Columbia, which uses patented technologies to
offer environmental solutions to both industrial and municipal
sanitation markets.
Geographic Area Information:
The Financial Statement (Item 8 of this Report) note
entitled "Geographic Area Information," found at page 22 thereof,
sets forth for the fiscal years 1992 through 1994 the Company's
revenue, profits, and assets with respect to the geographic areas
in which the Company operates.
Approximately 8 percent of the Company's revenues during
the fiscal year were attributable to its Canada operations. The
Company believes the construction risks of these operations are
similar to those presented by domestic projects. The Company
recognizes that foreign work may present financial and political
risks which must be specially considered. The Company attempts,
through its analysis and pricing arrangements, to mitigate these
risks and achieve a satisfactory profit.
Employees
The number of employees of the Company during the fiscal
year varied substantially from time to time, depending on work
volume, the status of completion of construction and
manufacturing contracts, weather, and season. The average number
of such employees was 1,620, including employees of joint
ventures sponsored by the Company. The number of salaried
employees averaged 574 during the same period.
Executive Officers of the Registrant.
J. J. Agresti (57) has been Chief Executive Officer and
President since April, 1994. He was President and Chief
Operating Officer of the Company from April, 1991 to April, 1994.
He was Executive Vice President of the Company from April, 1990
to April, 1991 and Group Vice President of the Company from
February, 1985 to April, 1990.
William J. Carlson (51) has been Senior Vice President of
the Company since April, 1991. From February, 1991 to the
present he has also served as President and General Manager of
Guy F. Atkinson Construction Company. From August, 1986 to
February, 1991 he was Vice President, Executive Vice President,
General Manager or President of the Company's Walsh Construction
Company division.
Herbert D. Montgomery (52) is Senior Vice President
Finance, Chief Financial Officer and Treasurer. He joined the
Company in June, 1994. He was Vice President Finance, Treasurer
and Chief Financial Officer from August, 1989 to June, 1994 of
Harding Associates, Inc., an environmental consulting engineering
company.
<PAGE>
Item 3. Legal Proceedings.
On March 7, 1995, a complaint was filed in the Supreme
Court of New York by Valeo and Valeo Engine Cooling against the
Company and its investment banker, Dillon, Read & Co. Inc. in
connection with the Company's sale of its manufacturing
subsidiary, Lake Center Industries, Inc. The Plaintiffs, the
unsuccessful bidder for Lake Center Industries, allege breach of
contract and other wrongdoing. They seek actual damages of $290
in connection with preparing their bid, $7,000 on a theory of
unjust enrichment and $10,000 in punitive damages.
Item 4. Submission of Matters to a Vote of Security
Holders
No matters were submitted to a vote of the security
holders during the fourth quarter of 1994.
PART II
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters.
(a) The Company's common stock is traded in the over-the-counter
market and is quoted on the National Association of
Securities Dealers Automated Quotation (NASDAQ) National Market
System under the symbol "ATKN." The following table sets forth
the high and low NASDAQ sales prices for such common stock in
each quarterly period during the two most recent fiscal years.
1994 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Low $ 8.00 $ 8.13 $ 9.50 $ 9.25
High 9.50 11.00 11.00 11.00
1993
Low $ 8.50 $ 8.75 $ 8.25 $ 8.25
High 10.00 9.88 10.00 9.75
(b) The number of holders of record of the Company's
common stock as of January 31, 1995 was 1,379.
(c) dividends declared in 1994 and 1993 are as
follows:
1994 1993
Dividends per share by quarter:
First $0.00 $0.00
Second 0.00 0.00
Third 0.00 0.00
Fourth 0.00 0.00
Total Dividends $0.00 $0.00
<PAGE>
<TABLE>
Item 6
Selected Financial Data.
(in thousands except per share amounts)
<CAPTION>
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Revenue $422,969 $345,036 $320,963 $519,290 $717,494
Loss from continuing operations, before
extraordinary item, and cumulative effect
of changes in accounting (52,023) (8,660) (779) (2,633) (29,273)
Income from discontinued operations 3,238 5,065 2,256 3,869 7,500
Gain on disposal of discontinued operations 36,866
Income (loss) before extraordinary item
and cumulative effect of changes in
accounting (11,919) (3,595) 1,477 1,236 (21,773)
Extraordinary item: Utilization of tax
loss carryforward 213
Cumulative effect of changes in accounting:
Postretirement healthcare costs (7,096)
Income taxes 12,070
Postemployment benefit costs (739)
Other 312
Net income (loss) $(12,658) $ 1,379 $ 1,690 $ 1,236 $(21,461)
Loss per share of common stock from
continuing operations, before extraordinary
item and cumulative effect of changes
in accounting $(5.86) $(0.99) $(0.09) $(0.30) $(3.33)
Income per share from discontinued operation $ 0.36 $ 0.58 $ 0.26 $ 0.44 $ 0.85
Gain per share from disposition of discontinued
operations $ 4.16
Income (loss) per share of common stock
before extraordinary item and cumulative
effect of changes in accounting $(1.34) $(0.41) $0.17 $0.14 $(2.48)
Extraordinary item per share of common stock $0.02
Cumulative effect per share of common stock
of changes in accounting $(0.08) $0.57 $0.03
Net income (loss) per share of common stock $(1.42) $0.16 $0.19 $0.14 $(2.45)
Total Assets $199,714 $271,879 $260,206 $272,816 $303,338
Long-term obligation, less current portion $ 2,199 $ 18,273 $ 18,227 $ 3,417 $ 4,452
Notes payable, including current portion
of long-term obligations $ 662 $ 36,568 $ 41,389 $ 39,475 $ 32,934
Dividends per share $0.48
Average number of shares and common stock
equivalents utilized in net income per share
calculations 8,877 8,788 8,777 8,777 8,777
</TABLE>
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Overview of the Business
Guy F. Atkinson Company of California provides a full
range of engineering, procurement, construction and related
services to worldwide clients in the power, industrial and
commercial building, pulp and paper, mining and infrastructure
markets. The Company operates through three construction
divisions, Guy F. Atkinson Construction Company, located in San
Bruno, California; Walsh Construction Company, located in
Trumbull, Connecticut; and Commonwealth Construction Company,
located in Vancouver, Canada.
The Company's traditional markets have been the United
States and Canada, with approximately 50% of its revenues
derived from public sector construction and the balance from
the private sector. The Company sells its construction
services on the basis of price through competitive bidding,
negotiated contracts, or a combination of both. Construction
work may be performed under contract for a fixed price, price
per unit of work performed, cost-reimbursable plus fee, or
other form of contract, with most contracts being of the fixed
price nature. The Company may perform construction work alone,
or in conjunction with full service design, engineering,
procurement and other services which may include taking a
project from inception through start-up.
In performing construction services on a fixed price
basis, the Company takes certain performance and financial
risks, namely that it can maintain project costs within budget
for the work to be performed, and that payment will be
forthcoming for work performed, including appropriate
compensation for work performed outside the defined scope of
the original contract. In exchange for assuming this risk, the
Company earns a gross margin, from which overhead and general
corporate expenses are met. From time to time, contract
disputes occur, generally arising from work performed resulting
from conditions or circumstances not envisioned in the original
contract. Such disputes may be negotiated to the satisfaction
of both parties, or, on occasion, may lead to litigation or
mediation, which can give rise to unforeseen losses and
additional expense to the Company.
Prior to 1994, the Company operated certain
nonconstruction businesses, engaged in automotive parts
manufacturing, pipe distribution, and oil and gas exploration
and production. In 1994, these businesses generated 29% of
combined revenues from both continuing and discontinued
operations and operated profitably. In the second quarter of
1994, the Company made the strategic decision to divest itself
of these businesses and seek potential buyers. This decision
was based on a comprehensive study of the Company's strategic
alternatives, carried out with the assistance of an investment
banking firm. This study concluded that the Company lacked the
necessary capital to grow the nonconstruction businesses to the
size at which they would be able to improve their competitive
position in their markets. At the same time, the existence of
favorable economic conditions in the automotive industry,
together with a supplier trend toward consolidation, presented
the opportunity to maximize the value received by the Company
for its automotive parts subsidiary by targeting potential
strategic acquirers that were seeking to expand market share or
broaden their product range. Accordingly, the Company obtained
competitive bids for its principal nonconstruction businesses,
and completed the planned dispositions during the third and
fourth quarters of 1994.
As a consequence of these dispositions, the Company's
profitability is more dependent than in prior years on its core
construction business, without the cushioning effect of profits
from other diverse businesses. However, the Company now has a
strong balance sheet, minimal short-term debt and sufficient
cash and liquid resources to enable it to more aggressively
pursue profitable construction and related opportunities. The
"post-disposition" Atkinson is rededicated to pursuing
opportunities which allow the Company to put its worldwide
"EPC" skills, expertise and reputation to work in obtaining
more profitable construction projects. The Company is also
pursuing opportunities that are ancillary to its construction
business. To this goal, the Company is developing a geothermal
resource, and has acquired the rights to patented water
treatment and water purification technologies, with which the
Company plans to offer environmental solutions to both
industrial and municipal sanitation markets.
Reclassification of Statement of Operations
As a result of the Company's sale of substantially all
of its nonconstruction businesses (as explained in the note to
the Financial Statements entitled "Discontinued Operations and
Restructuring") certain income statement amounts for 1994, 1993
and 1992 have been reclassified as discontinued operations.
Revenues and expenses reflect only those amounts attributable
to the ongoing construction and other businesses of the
Company, while the net operating results of the disposed
businesses, and the related gain on disposition, have been
shown separately.
Results of Operations (all dollar amounts in thousands unless
otherwise stated)
Revenue: The Company's revenues from continuing
construction operations in 1994 were $417,563, an increase of
29% over 1993 and 34% over 1992. All of the Company's
construction divisions generated increased revenues in 1994,
with the most significant improvement being in the industrial
market sector.
Backlog of construction contracts at December 31, 1994
amounted to $310,000, compared with $686,000 at December 31,
1993 and $739,000 at December 31, 1992. The reduction in
backlog from 1993 to 1994 of $376,000, reflects approximately
$293,000 attributable to the removal from backlog of an awarded
but long-delayed industrial construction contract due to the
uncertainty surrounding the project. Although year-end 1994
backlog is lower than a year earlier, the Company has obtained
new construction awards totalling $176,000 in the first two
months of 1995.
Revenues from the Company's discontinued construction
business unit declined to $3,080 in 1994 from $19,873 in 1993
and $6,422 in 1992. Substantially all of these revenues in
each of the three years are attributable to the resolution of
construction disputes of earlier years. Revenues from other
activities have remained flat at $2,326.
Gross Margin: The Company's gross margin from
continuing construction operations declined to a negative
$6,891 in 1994 from $23,510 in 1993 and $26,153 in 1992. The
reduction in gross margin of $30,401, comparing 1994 to 1993,
is attributable to the following events:
(i) adjustments to the estimated recoverable
amounts of assets associated with construction
disputes - $14,952
(ii) adjustments to the costs of contracts in
progress to reflect unexpected cost overruns -
$11,021
(iii) adjustments to the carrying value of construction
equipment and inventories to reflect net realizable
value - $2,193
(iv) provision for write-down of an investment - $1,605
These adjustments arose principally from the Company's
restructuring program which was put into place in the fourth
quarter of 1994. This program encompassed a review of the
Company's policies with regard to the administration of
construction disputes as well as the recoverable amount of the
assets associated with such disputes. The Company also
reviewed the recoverability of other assets, the carrying value
of which is subject to management estimates of the probability
of occurrence of certain events. Although construction
revenues and profits are necessarily based on certain
estimates, which are periodically subject to revision, the
Company believes that these adjustments are adequate to
provide for losses which can be reasonably foreseen at this
time.
Gross margin from the Company's discontinued
construction business unit amounted to a negative $4,453 in
1994, compared to a negative $5,795 in 1993 and a positive
$2,949 in 1992. Substantially all of the gross margin from
this business unit is attributable to the resolution of
construction disputes of earlier years. The Company has
provided reserves for the estimated costs of resolution of the
remaining outstanding disputes and final closure of this
operation.
Gross margin from other operations was a negative
$2,736 in 1994, compared to a positive $1,014 in 1993 and a
positive $1,200 in 1992. The reduction in gross margin of
$3,750, comparing 1994 to 1993, is attributable to the
impairment in value of the assets of an inactive subsidiary,
together with provision for settlement of certain third party
claims against that subsidiary, amounting to $3,197, as well as
start-up losses of the Company's water and effluent treatment
business, which amounted to $993.
Restructuring Charges: As outlined in the note to the
Financial Statements entitled "Discontinued Operations and
Restructuring," the Company took a non-recurring restructuring
charge in 1994 of $4,169. This charge is to cover severance
costs related to reductions in staffing levels, consolidation
of offices and facilities, and disposition of non-productive
assets.
General and Administrative Expenses: General and
administrative expenses amounted to $39,080 in 1994, an
increase of 29% over 1993 and 18% over 1992. In dollar terms,
the 1994 expense increased by $8,778. Of this increase, $6,683
was attributable to increased costs of the Company's insurance
programs (principally workers' compensation and general
liability), which included approximately $4,500 of adjustments
to loss reserve balances reflecting actuarial review of the
Company's potential exposure to existing and future claims.
A further increase in general and administrative expense of
$1,322 was attributable to an unusually high level of claims
activity under the Company's healthcare programs.
Interest Income: Interest income, principally from
short-term investments, amounted to $563 in 1994, compared to
$808 in 1993 and $2,221 in 1992. The 1992 amount included
$1,355 attributable to an income tax refund.
Miscellaneous, net: Miscellaneous income, net, of $887
in 1994 consists primarily of foreign exchange gains. The
corresponding amount in 1993 of $6,942 was principally derived
from a gain on disposition of the Company's headquarters
property of $7,243, while the 1992 amount of $2,913 was mainly
attributable to a gain on the termination of a lease amounting
to $1,464, royalty income of $522, and foreign exchange gains
of $993.
Interest Expense: Interest expense amounted to $4,902
in 1994, an increase of 41% over 1993 and 58% over 1992. The
increase in 1994 over 1993, amounting to $1,421, was due to the
accrual of interest of $1,715 relating to a disputed income tax
assessment.
Income Taxes: Income taxes on continuing operations
resulted in a credit of $8,758 in 1994, compared with an
expense of $1,356 in 1993, and $108 in 1992. The credit in
1994 is due to the allocation of federal income tax expense to
the gain on disposition of discontinued operations in an amount
greater than the actual federal income tax liability, with an
offsetting credit being attributable to continuing operations.
The income tax expense in 1993 and 1992 is due to domestic
losses for which no tax benefit was recognized, coupled with
Canadian income taxes at higher rates than the U.S. statutory
rate, state income taxes, and foreign taxes for which tax
credits were not available. A reconciliation between the
Company's effective income tax rate and the statutory federal
income tax rate is provided in the note to the Financial
Statements entitled "Income Taxes."
Discontinued Operations: Discontinued operations
provided net income of $3,238, $5,065 and $2,256 in the years
1994, 1993 and 1992, respectively. Net results for 1992 were
adversely impacted by a net loss of $1,526 in the Company's
pipe distribution business, which showed modest profitability
in 1993 and 1994, and by below normal profitability in the
Company's automotive manufacturing subsidiary. In 1994, the
Company's oil and gas operations produced a net loss of $210,
compared to a net profit of $1,024 in the previous year. Due
to the sale of discontinued operations during 1994, the results
of those operations are included for less than a full year in
1994.
Gain on Disposal of Discontinued Operations: As
explained more fully in the note to the Financial Statements
entitled "Discontinued Operations and Restructuring," the
disposal of the Company's principal nonconstruction operations
resulted in a net after tax gain in 1994 of $36,866.
Net Income (Loss): In 1994, the Company reported a
loss before extraordinary item and the cumulative effect of
changes in accounting of $11,919, compared with a loss of
$3,595 in 1993, and income of $1,477 in 1992. In 1992, the
utilization of a tax loss carryforward resulted in a gain of
$213.
As explained more fully in the note to the financial
statements entitled "Summary of Significant Accounting Policies
- Changes in Accounting Principles," the Company adopted
Statement of Financial Accounting Standards No. 106 and 109 on
January 1, 1993 and No. 112 on January 1, 1994 resulting in a
net accounting gain of $4,974 in 1993 and an accounting charge
of $739 in 1994. After giving effect to accounting changes,
the Company recorded a net loss of $12,658 ($1.42 per share of
common stock) in 1994, compared to net income of $1,379 ($0.16
per share) in 1993, and net income of $1,690 ($0.19 per share)
in 1992.
In 1994, the Company recorded a reduction in the
accumulated translation adjustment of stockholders' equity in
the amount of $1,808 as a result of unfavorable changes in the
exchange rate of the Canadian dollar following a similar
reduction of $1,207 in 1993 and $3,031 in 1992. In addition,
the Company recorded a charge to stockholders' equity in 1993
with respect to unearned compensation in the amount of $759 for
the issuance of restricted shares of common stock which would
be earned based on certain performance objectives. As a result
of those objectives not being met, this charge was reduced, in
1994, by $152 to reflect the forfeiture of a portion of these
restricted shares, and increased by $129 to reflect the
increase in value of those restricted shares which remain
outstanding. The adjustments to equity for restricted stock
are offset by corresponding adjustments to paid-in capital.
Also, in 1993, the Company recorded a charge to
stockholders' equity of $805 pertaining to a minimum pension
liability resulting from lowering the assumed discount rate
used to measure pension liabilities. In 1994, an increase in
the assumed discount rate resulted in the reversal of this
charge. An explanation of the accounting for pension assets
and liabilities is contained in the note to the Financial
Statements entitled "Employees' Pension and Retirement Plans."
Liquidity and Capital Resources
As reported in the Consolidated Statements of Cash Flows,
operating activities of continuing operations provided cash of
$14,201 in 1994, compared with a utilization of cash of $20,844
in 1993 and $27,870 in 1992. The improvement in operating cash
flow in 1994 was due to the collection of $15,754 from contract
disputes, as well as the reduction of investment in accounts
receivable, inventories and unamortized costs, and joint
ventures.
The operating activities of discontinued operations
utilized cash of $3,448 in 1994, compared with positive cash
flow amounting to $10,324 and $15,003 in 1993 and 1992
respectively. Operating cash flow for discontinued operations
deteriorated in 1994 due to increases in working capital needs
in the Company's manufacturing subsidiary and pipe distribution
unit as both of these businesses geared up for increased sales
volume. In addition, oil and gas activities generated
significantly lower cash flow in 1994 as a result of reduced
revenues from production and the discontinuation of cash flows
due to the sale of producing properties in August 1994.
Manufacturing and pipe distribution operations were also sold
in November and December 1994.
Investing activities generated cash of $96,882 in 1994,
compared with $9,137 in 1993 and a net use of cash of $4,242 in
1992. In 1994, the sale of nonconstruction businesses
generated cash, net of expenses, amounting to $100,903, while,
in 1993, the sale of the Company's headquarters building
generated cash of $12,000.
Financing activities utilized cash of $35,039 in 1994
and $4,775 in 1993, while providing cash of $16,724 in 1992.
During 1992, the Company obtained an unsecured term loan of
$15,000, while in 1993 the Company used available funds to pay
down short-term borrowings. In 1994, all remaining short-term
borrowings were retired out of the proceeds of the sale of
nonconstruction operations.
The Company currently has no material commitments for
capital expenditures. However it anticipates purchasing
equipment in the normal course of its business and meeting
liquidity requirements from internally generated funds or
through available lines of credit. Cash requirements for
construction operations are dependent upon construction
contract payment provisions, the volume of work scheduled for
performance, and the timing and success of dispute resolutions.
On February 28, 1995, the Company declared a dividend
of $2.00 per share of common stock, payable on March 31, 1995
for shareholders of record on March 15, 1995. This dividend
will result in a reduction in cash and short-term investments
of approximately $17,846, with a corresponding reduction in
stockholders' equity. The Company has available cash and
short-term investments sufficient to fund the dividend payment.
As of December 31, 1994, the Company's available short-term
lines of credit amounted to approximately $33,565. The
availability of these lines of credit is reduced by any letters
of credit which may be outstanding under the lines. At
December 31, 1994 the Company had no borrowings outstanding,
and $7,961 of standby letters of credit outstanding. These
lines of credit, together with related covenants, are generally
renegotiated annually. The Company's principal line of credit
expires on October 1, 1995. The terms of renewal are dependent
upon operating results, future circumstances and events, and
conditions in the credit market at the time of renewal.
The Company reasonably believes that its cash and
invested balances, together with lines of credit, funds
generated from operations including claim settlements, and from
investing and financing activities, will be adequate for
foreseeable future requirements.
Item 8. Financial Statements and Supplementary Data.
Reference is made to the Consolidated Balance Sheet,
Consolidated Statement of Stockholders' Equity, Consolidated
Statements of Income, Consolidated Statements of Cash Flows,
Notes to Consolidated Financial Statements, Financial Statement
Schedule and Report of Certified Public Accountants bound
separately and attached to this Form 10-K.
Item 9. Disagreements on Accounting and Financial
Disclosure.
None.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the
Registrant.
Information with respect to directors and certain
executive officers of the Company is incorporated by reference
from the information under the caption "Information with
Respect to Nominees" in the Company's definitive proxy
statement for the Annual Meeting of Shareholders to be held on
April 19, 1995 ("Annual Meeting"). Information regarding other
executive officers of the Registrant is contained in Item 1 of
this 10-K.
Item 11. Executive Compensation.
Incorporated by reference from the information under
the caption "Compensation of Directors and Executive Officers"
in the Company's definitive proxy statement for the Annual
Meeting of Shareholders to be held on April 19, 1995.
<PAGE>
Item 12. Security Ownership of Certain Beneficial
Owners and Management.
Incorporated by reference from the information to be
included under the captions "Certain Beneficial Ownership of
Securities" and "Stock Ownership of Executive Officers and
Directors" in the Company's definitive proxy statement for the
Annual Meeting of Shareholders to be held April 19, 1995.
Item 13. Certain Relationships and Related
Transactions.
Incorporated by reference from the information under
the caption "Certain Transactions" in the Company's definitive
proxy statement for the Annual Meeting of Shareholders to be
held April 19, 1995.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K.
Reference Page
Bound Attachment
(a) 1. Consolidated Financial Statements.
Report of Independent Accountants. . . . . . . . 2
Consolidated balance sheets at Decem-
ber 31, 1994 and December 31, 1993 . . . . . . 3
Consolidated statement of stockholders'
equity for each of the three years in
the period ended December 31, 1994 . . . . . . 4
Consolidated statements of operations for
each of the three years in the period
ended December 31, 1994. . . . . . . . . . . . 5-6
Consolidated statements of cash flows
for each of the three years in the
period ended December 31, 1994 . . . . . . . . 7
Notes to financial statements. . . . . . . . . . 8-25
2. Financial Statement Schedule.
IX Short-term Borrowings . . . . . . . . . . . . 26
3. Exhibits.
Exhibit
Number Description
2 Agreement of Merger and Plan of Reorganization dated
as of April 22, 1994 between the Company and Guy F.
Atkinson Company of California, a California
corporation, for the purpose of merging to
reincorporate the California company in the state of
Delaware.
3.1 Certificate of Incorporation of the Company, filed as
an exhibit to the Form 10-Q of the Company for the
period ended March 31, 1994 (File No. O-3062) and
incorporated herein by reference.
3.2 Bylaws of the Company, filed as an exhibit to the Form
10-Q of the Company for the period ended March 31,
1994 (File No. O-3062) and incorporated herein by
reference.
4 Stockholder Rights Agreement, dated as of May 9, 1994,
between the Company and The Bank of New York, as
Rights Agent ("Shareholder Rights Agreement"), filed
as an exhibit to the Form 8-A of the Company filed on
May 10, 1994 (File No. O-3062) and incorporated herein
by reference.
10.1 Loan Agreement and Guaranty Agreement, dated December
23, 1991, relating to a loan from the Guy F. Atkinson
Company Federal Credit Union and guaranteed by Guy F.
Atkinson Company, a Nevada corporation, to William J.
Carlson, filed as Exhibit 10.1 to the Company's 1991
Form 10-K and incorporated herein by reference.
10.2 Atkinson Corporate Management Incentive Compensation
Plan. Filed as Exhibit 10.4 to the Company's 1988
Form 10-K and incorporated herein by reference.
10.3 Guy F. Atkinson Company of California 1990 Executive
Stock Plan filed as Exhibit 10.3 to the Company's 1990
Form 10-K and incorporated herein by reference.
10.4 Guy F. Atkinson Company of California Common Stock
Purchase Warrant dated May 28, 1993 beween the Company
and Morgan Guaranty Trust Company filed as Exhibit
10.4 to the Company's 1993 Form 10-K report and
incorporated herein by reference.
10.5 Employment Agreement dated as of April 21, 1994,
between the Company and Jack J. Agresti.
10.6 Continued Employment and Voluntary Retirement
Agreement dated April 21, 1994 between the Company and
Thomas J. Henderson.
10.7 Resignation Agreement and General Release dated as of
May 11, 1994, between the Company and Christine V.
Braunlich.
21 Subsidiaries of the Company
24 Powers of Attorney of certain Directors
(b) Reports on Form 8-K.
On December 15, 1994, the Company filed a Report on
Form 8-K on the disposition of the assets of its Canadian pipe
distribution unit, Comco Pipe & Supply Company and the sale of
the outstanding shares of its manufacturing unit, Lake Center
Industries, Inc. Consolidated unaudited pro forma financial
statements of the Company as at September 30, 1994 and for the
quarter and nine months periods then ended, together with the
year ended December 31, 1993, were filed with the Form 8-K.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
GUY F. ATKINSON COMPANY OF CALIFORNIA
By: /S/ J. J. Agresti
J. J. /Agresti
President and Chief Executive Officer
Date: March 20, 1995.
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and
on the dates indicated.
/S/ J. J. Agresti President and Chief March 20, 1995
J. J. Agresti Executive Officer
/S/ H. D. Montgomery Senior Vice President March 20, 1995
H. D. Montgomery Chief Financial
Officer and Treasurer
(Principal Financial
Officer)
/S/ J. Harrison Controller March 20, 1995
J. Harrison (Principal Accounting
Officer)
/S/ D. E. Atkinson Director March 20, 1995
D. E. Atkinson
<PAGE>
/S/ R. N. Atkinson* Director March 16, 1995
R. N. Atkinson
/S/ W. E. Burch* Director March 20, 1995
W. E. Burch
/S/ J. P. Frazier* Director March 20, 1995
J. P. Frazier
/S/ D. R. Kayser* Director March 20, 1995
D. R. Kayser
/S/ R. J. Turner* Director March 20, 1995
R. J. Turner
/S/ J. F. Whitsett* Director March 20, 1995
J. F. Whitsett
*By:/S/ Therese Ambrusko
Therese Ambrusko,
Attorney-In-Fact
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the
registration statement of Guy F. Atkinson Company of California
on Post-Effective Amendment No. 2 to Form S-8 (File No. 33-6296)
and Form S-8 (File No. 33-34891) of our report dated
February 16, 1994, on our audits of the consolidated financial
statements and financial statement schedule of Guy F. Atkinson
Company of California as of December 31, 1993 and 1992, and for
the years ended Decembe 31, 1993, 1992 and 1991, which report
is included in this Annual Report on Form 10-K.
Coopers & Lybrand
San Francisco, California
March 16, 1995
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
GUY F. ATKINSON COMPANY OF CALIFORNIA
AND CONSOLIDATED SUBSIDIARIES
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1994 and 1993
and
FOR THE THREE YEARS ENDED
DECEMBER 31, 1994, 1993 and 1992
<PAGE>
GUY F. ATKINSON COMPANY OF CALIFORNIA
AND CONSOLIDATED SUBSIDIARIES
INDEX
_____________________
Item 8. Financial Statements and Supplementary Data.
(a) Financial Statements
Financial statements of the registrant and consolidated
subsidiaries are included as a separate section of this report.
The index to these financial statements follows:
Page
Report of Independent Accountants 2
Consolidated Financial Statements:
Balance Sheets, December 31, 1994 and 1993 3
Statements of Stockholders' Equity for the years
ended December 31, 1994, 1993 and 1992 4
Statements of Operations for the years ended
December 31, 1994, 1993 and 1992 5-6
Statements of Cash Flows for the years ended
December 31, 1994, 1993 and 1992 7
Notes to Financial Statements 8-25
Financial statement schedule:
IX Short-term Borrowings 26
____________________
Schedules other than those mentioned above are omitted
because the conditions requiring their filing do not exist or
because the required information is given in the financial
statements, including the notes thereto.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Guy F. Atkinson Company of California:
We have audited the consolidated financial statements and the
financial statement schedule of Guy F. Atkinson Company of
California and Consolidated Subsidiaries listed in Item 8(a) of
this Form 10-K. These financial statements and the financial
statement schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements and the financial statement schedule based
on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Guy F. Atkinson Company of California and
Consolidated Subsidiaries as of December 31, 1994 and 1993, and
the consolidated results of their operations and their cash flows
for each of the three years in the period ended December 31, 1994
in conformity with generally accepted accounting principles. In
addition, in our opinion, the financial statement schedule
referred to above, when considered in relation to the basic
financial statements taken as a whole, presents fairly, in all
material respects, the information required to be included
therein.
As discussed in the notes to the consolidated financial
statements, in 1994 and 1993, the Company adopted Statement of
Financial Accounting Standards No. 112, Employers' Accounting for
Postemployment Benefits, and Statements of Financial Accounting
Standards No. 106, Employers' Accounting for Postretirement
Benefits Other Than Pensions and No. 109, Accounting for Income
Taxes, respectively.
San Francisco, California Coopers & Lybrand L.L.P.
February 28, 1995, except for the
"Litigation and Contingencies"
footnote which is as of March 7, 1995
<PAGE>
GUY F. ATKINSON COMPANY OF CALIFORNIA
AND CONSOLIDATED SUBSIDIARY COMPANIES
(thousands of dollars or shares)
<TABLE>
<CAPTION>
Consolidated Balance Sheets December 31, 1994 and 1993
A S S E T S 1994 1993 L I A B I L I T I E S 1994 1993
<S> <C> <C> <S> <C> <C>
Current assets: Current Liabilities:
Cash and short-term investments $ 78,441 $ 6,848 Notes payable, including current
Accounts receivable: portion of long-term obligations $ 662 $ 36,568
Construction contracts 21,839 45,488 Accounts payable 39,743 65,629
Other 11,311 32,910 Billings in excess of costs and estimated
Costs and estimated earnings in excess earnings 16,920 8,504
of billings 4,338 6,274 Accrued payroll 5,276 6,235
Inventories and unamortized costs Accrued federal & foreign income taxes 6,953 5,777
on contracts in progress 20,062 64,485 Other accrued taxes 4,255 1,488
Investments in joint ventures 40,503 53,600 Other accrued expenses 18,964 9,441
Deferred income taxes 23 - Deferred income taxes - 342
Other current assets 3,163 7,661 Due to joint ventures 103 3,030
Total current assets 179,680 217,266 Total current liabilities 92,876 137,014
Property, plant, and equipment, at cost: Long-term obligations, less
Land 3,969 5,253 current portion 2,199 18,273
Buildings 17,371 28,093
Construction equipment 25,361 30,454 Postretirement health care obligations
Other equipment 5,195 27,099 and postemployment benefit obligations 7,651 6,912
51,896 90,899
Less accumulated depreciation 34,345 56,717 Total liabilities 102,726 162,199
17,551 34,182 S T O C K H O L D E R S' E Q U I T Y
Oil, gas and other energy properties Preferred stock, $0.01 par value; 2,000 shares
net of depreciation, depletion and authorized; none issued or outstanding
amortization - 7,339 Common stock, $0.01 par value; 20,000 shares
authorized; 8,951 and 8,869 issued and
Deferred income taxes 88 11,158 outstanding at December 31, 1994 and-
December 31, 1993 respectively 1,894 1,894
Other assets 2,395 1,934
Paid-in-capital 13,185 12,239
Accumulated translation adjustment (5,249) (3,441)
Unearned compensation (736) (759)
Additional pension liability - (805)
Retained earnings 87,894 100,552
Total stockholders' equity 96,988 109,680
$199,714 $271,879 $199,714 $271,879
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
GUY F. ATKINSON COMPANY OF CALIFORNIA
<TABLE>
<CAPTION>
Consolidated Statements of Stockholders' Equity
(thousands of dollars except share amounts) Years Ended December 31, 1994, 1993 and 1992
Accumulated Unearned Additional
Capital Stock Paid-in Translation Compensa- Pension Retained
No. of Shares Amount Capital Adjustment tion Liability Earnings
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1991 8,777,224 $1,894 $11,480 $ 797 - - $ 97,483
Net income for the year - 1992 1,690
Foreign currency translation
adjustment - 1992 (3,031)
Balance, December 31, 1992 8,777,224 1,894 11,480 (2,234) - - 99,173
Net income for the year - 1993 1,379
Restricted shares issued in the
year - 1993 92,000 759 $(759)
Foreign currency translation
adjustment - 1993 (1,207)
Additional minimum pension
liability - 1993 $(805)
Balance, December 31, 1993 8,869,224 1,894 12,239 (3,441) (759) (805) 100,552
Net (loss) for the year - 1994 (12,658)
Restricted shares forfeited in
the year - 1994 (18,400) (152) 152
Restricted shares valuation
adjustment - 1994 129 (129)
Restricted shares issued to Pension
Plan - 1994 100,000 969
Foreign currency translation
adjustment - 1994 (1,808)
Adjustment to minimum pension
liability - 1994 805
Balance, December 31, 1994 8,950,824 $1,894 $13,185 $(5,249) $(736) $ - $ 87,894
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
GUY F. ATKINSON COMPANY OF CALIFORNIA
<TABLE>
<CAPTION>
Consolidated Statements of Operations
(thousands of dollars except per share amounts) Years Ended December 31:
1994 1993 1992
<S>
Revenue: <C> <C> <C>
Construction - continuing $417,563 $322,981 $312,256
Construction - discontinued business unit 3,080 19,873 6,422
Other 2,326 2,182 2,285
422,969 345,036 320,963
Cost of revenue:
Construction - continuing 424,454 299,471 286,103
Construction - discontinued business unit 7,533 25,668 3,473
Other 5,062 1,168 1,085
437,049 326,307 290,661
Gross margin:
Construction - continuing (6,891) 23,510 26,153
Construction - discontinued business unit (4,453) (5,795) 2,949
Other (2,736) 1,014 1,200
(14,080) 18,729 30,302
Restructuring charges 4,169 - -
General and administrative expenses 39,080 30,302 33,007
(Loss) from operations (57,329) (11,573) (2,705)
Other income (expense), net:
Interest income 563 808 2,221
Miscellaneous, net 887 6,942 2,913
1,450 7,750 5,134
Less:
Interest expense 4,902 3,481 3,100
Other income (expense), net (3,452) 4,269 2,034
(Loss) from continuing operations before
income taxes, extraordinary item, and
cumulative effect of changes in accounting (60,781) (7,304) (671)
Provision (benefit) for income taxes (8,758) 1,356 108
(Loss) from continuing operations before
extraordinary item and cumulative effect
of changes in accounting (52,023) (8,660) (779)
Discontinued operations, net of income taxes:
Income from discontinued operations 3,238 5,065 2,256
Gain on disposal of discontinued operations 36,866 - -
40,104 5,065 2,256
Income (loss) before extraordinary item and
cumulative effect of changes in accounting (11,919) (3,595) 1,477
Extraordinary item:
Utilization of tax loss carryforward 213
Cumulative effect of changes in accounting:
Postemployment benefit costs (739) - -
Postretirement health care costs - (7,096) -
Income taxes - 12,070 -
(739) 4,974 -
Net income (loss) $(12,658) $ 1,379 $ 1,690
The accompanying notes are an integral part of these financial statements
</TABLE>
<PAGE>
GUY F. ATKINSON COMPANY OF CALIFORNIA
<TABLE>
<CAPTION>
Consolidated Statements of Operations, continued
(thousands of dollars except per share amounts) Years Ended December 31:
1994 1993 1992
<S> <C> <C> <C>
(Loss) per share of common stock from continuing
operations before extraordinary item and
cumulative effect of changes in accounting $(5.86) $(0.99) $(0.09)
Income per share of common stock from discontinued
operations, net of income taxes 4.52 0.58 0.26
Income (loss) per share of common stock before
extraordinary item and cumulative effect of
changes in accounting (1.34) (0.41) 0.17
Extraordinary item per share - - 0.02
Cumulative effect per share of changes in
accounting (0.08) 0.57 -
Net income (loss) per share of common stock $(1.42) $ 0.16 $ 0.19
Average number of shares and common stock
equivalents utilized in net income (loss)
per share calculations 8,877 8,788 8,777
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
GUY F. ATKINSON COMPANY OF CALIFORNIA
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
(thousands of dollars) Years Ended December 31:
1994 1993 1992
<S> <C> <C> <C>
Operating activities:
Net income (loss) $(12,658) $ 1,379 $ 1,690
Adjustments to reconcile net income (loss) to net cash provided by (used for)
operating activities:
Income from discontinued operations (3,238) (5,065) (2,256)
Restructuring charges 4,169 - -
Depreciation, depletion and amortization 2,822 2,684 3,037
Provision for loss on investment in energy properties 300 -
Deferred income taxes 1,104 1,729 (3,005)
(Gain) on dispositions of property, plant and equipment (92) (7,704) (662)
(Gain) on disposition of discontinued operations (36,866) - -
Cumulative effect of changes in accounting 739 (4,974) -
Changes in operating assets and liabilities:
Accounts receivable 21,965 (16,767) 28,609
Inventories and unamortized costs 15,601 21,410 (14,787)
Investments in joint ventures 10,190 (14,894) (4,226)
Other current assets 1,557 3,668 (4,218)
Accounts payable and accrued expenses 6,525 (3,772) (25,815)
Accrued income taxes (7,757) 1,395 (659)
Billings in excess of costs and estimated earnings, net 10,351 698 (5,428)
Other, net (511) (631) (150)
Net cash provided by (used in) operating activities from continuing
operations 14,201 (20,844) (27,870)
Net cash provided by (used in) operating activities from discontinued
operations (3,448) 10,324 15,003
Net cash provided by (used in) operating activities 10,753 (10,520) (12,867)
Cash flows from investing activities:
Property, plant, and equipment expenditures (1,852) (2,472) (2,748)
Proceeds from dispositions of property, plant, and equipment 1,036 14,260 2,438
Proceeds from disposition of discontinued operations 100,903 - -
Increase in other assets, net (778) (540) (210)
Net investing activities of discontinued operations (2,427) (2,111) (3,722)
Net cash provided by (used in) investing activities 96,882 9,137 (4,242)
Cash flows from financing activities:
Short-term borrowings (repayments), net (34,215) (5,785) 1,560
Proceeds of long-term borrowings - 453 16,218
Long-term debt repayments (678) (1,118) (1,161)
Net financing activities of discontinued operations (146) 1,675 107
Net cash provided by (used in) financing activities (35,039) (4,775) 16,724
Effect of exchange rate changes on cash (1,003) (1,132) (2,950)
Net increase (decrease) in cash and short-term investments $ 71,593 $ (7,290) $ (3,335)
Supplementary information:
Cash paid (received) during the year for:
Interest $ 4,798 $ 5,131 $ 4,794
Federal, foreign, and state income taxes 838 (533) 3,977
Common stock contributed to pension plan 969 - -
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include Guy F.
Atkinson Company of California and its subsidiaries.
Investments in joint ventures are recorded on the equity
method. Significant transactions between the Company and
its subsidiaries are eliminated in consolidation.
Construction Contract Accounting
Annual revenues on uncompleted construction contracts,
including the Company's share of joint-venture contracts,
are recognized on the percentage of completion basis,
determined by the ratio of costs incurred to Company
engineers' estimates of total costs. Revenue from claims by
the Company for additional contract compensation is recorded
when agreed to by the owner. Provision is made currently
for any anticipated future losses on contracts in progress.
The classification of construction contract-related current
assets and current liabilities is based on the Company's
contract performance cycle that may exceed one year.
Cash and Short-term Investments
Short-term investments consist of debt securities with a
maturity of three months or less, which are classified as
"held-to-maturity" and carried at amortized cost.
Inventories and Unamortized Costs on Contracts in Progress
Inventories are valued at the lower of cost (principally
first-in, first-out) or market prices. Unamortized costs on
contracts in progress include the cost of plant and project
facilities to be absorbed over the life of the projects, the
estimated value of recoverable assets, and costs related to
unpriced change orders for additional contract compensation
to the extent their recovery is probable.
Property, Plant, and Equipment
Property, plant, and equipment are stated at cost. Major
improvements and renewals are capitalized, while maintenance
and repairs are charged to cost as incurred.
Construction equipment is generally depreciated over its
estimated useful life using a method combining the sum-of-the-years
digits and hours-of-service methods. The Company
depreciates all other property, plant, and equipment
principally on a straight-line basis.
<PAGE>
Summary of Significant Accounting Policies, continued
Property, Plant, and Equipment, continued
Upon sale or retirement of property, plant, and equipment,
the related costs and accumulated depreciation or
amortization are removed from the accounts and any resulting
gain or loss is included in income.
Income Taxes
Deferred income taxes are recognized for the tax
consequences in future years of differences between the tax
bases of assets and liabilities and their financial
reporting amounts at each year-end based on enacted tax laws
and statutory tax rates applicable to the periods in which
the differences are expected to affect taxable income.
Valuation allowances are established when necessary to
reduce deferred tax assets to the amount expected to be
realized. Income tax expense is the tax payable for the
period and the change during the period in deferred tax
assets and liabilities.
Concentration of Credit Risk
Financial instruments that potentially subject the Company
to concentrations of credit risk consist principally of
short-term investments and accounts receivable.
The Company places excess cash in U.S. and Canadian
government debt obligations, investment grade commercial
paper and certificates of deposit, in accordance with
investment objectives which are designed to preserve
principal, meet liquidity needs, avoid credit risk and
achieve a satisfactory yield. The Company provides
construction services to a large number of public agencies
and private sector companies in different industries and
geographic areas. The Company performs ongoing credit
evaluations of its customers and generally does not require
collateral. The Company maintains reserves for potential
credit losses and such losses have been within management's
expectations.
Earnings per share
Earnings per share of common stock and common stock
equivalents are calculated using the weighted average number
of common shares outstanding, excluding restricted shares
for which performance goals have not been met, plus (in
periods where they have a dilutive effect) the net
additional number of shares which would be issuable upon the
exercise of stock options and warrants, assuming that the
Company used the proceeds received to repurchase outstanding
shares at market prices.
<PAGE>
Summary of Significant Accounting Policies, continued
Changes in Accounting Principles
Effective January 1, 1994, the Company implemented Statement
of Financial Accounting Standards No. 112 (SFAS 112)
"Employers' Accounting for Postemployment Benefits."
SFAS 112 is concerned with postemployment benefits, such as
self-insured disability benefits, provided to former or
inactive employees and requires that such benefits be
accounted for on an accrual basis. As permitted by the
standard, the Company recorded a charge to income of $739
representing the obligation for accumulated postemployment
benefits attributable to service prior to 1994.
In 1993, the Company recorded an accounting charge of $7,096
for postretirement health care costs upon the adoption of
SFAS 106 and an accounting gain of $12,070 representing
deferred income tax benefits upon the adoption of SFAS 109.
Reclassification of 1993 and 1992 Financial Statements
Certain amounts for 1993 and 1992 have been reclassified to
conform with the 1994 financial statement presentation and
have not affected previously reported net income or
stockholders' equity.
Cash and Short-Term Investments
Cash and short-term investments consist of the following:
1994 1993
Canadian government debt obligations $13,429 $ -
Investment grade commercial paper 56,336 -
Cash balances 8,676 6,848
$78,441 $6,848
Debt securities, all of which have a maturity of three months or
less, are recorded at amortized cost, which approximates market
value.
Accounts Receivable
Accounts receivable includes retained percentages of $8,288 and
$5,947 at December 31, 1994 and 1993, respectively. The amount
for 1994 is expected to be collected as follows: $7,823 in
1995, $90 in 1996 and $375 in 1997.
<PAGE>
Inventories and Unamortized Costs on Contracts in Progress
The major classifications of inventory are as follows:
1994 1993
Construction materials, parts and
supplies $ 3,724 $ 4,392
Inventories of discontinued
operations - 28,882
Unamortized costs on contracts
in progress 16,338 31,211
$20,062 $64,485
Unamortized costs on contracts in progress includes $13,965
(1993 - $25,466) of costs relating to unapproved change orders
and claims.
Investments in Joint Ventures
The Company participates in various joint ventures which operate
in the construction industry in the United States, Canada, and
other foreign countries. The combined assets, liabilities, and
net assets of these ventures are as follows:
Company's Other
Total Interest Interests
1994
Assets $190,640 $66,196 $124,444
Liabilities 91,034 25,796 65,238
Net assets $ 99,606 $40,400 $ 59,206
1993
Assets $167,568 $65,384 $102,184
Liabilities 55,028 14,814 40,214
Net assets $112,540 $50,570 $ 61,970
The Company's interest is included in the accompanying
consolidated balance sheets as follows:
1994 1993
Investments in joint ventures $40,503 $53,600
Due to joint ventures (103) (3,030)
$40,400 $50,570
<PAGE>
Investments in Joint Ventures, continued
The revenue and cost of revenue of joint ventures which are
included in the accompanying consolidated statements of income
are as follows, (in millions of dollars):
Revenue Cost of Revenue
1994 1993 1992 1994 1993 1992
Sponsored joint
ventures $121.9 $141.2 $126.1 $109.9 $125.1 $110.4
Less other vent-
urers' shares 62.3 81.7 76.7 49.9 70.6 68.6
Company's interest 59.6 59.5 49.4 60.0 54.5 41.8
Company's interest
in nonsponsored
joint ventures 41.3 56.5 27.7 44.8 49.0 22.0
$100.9 $116.0 $ 77.1 $104.8 $103.5 $ 63.8
Credit Agreements
The Company has short-term credit lines with domestic and
foreign banks aggregating approximately $33,565. The Company's
credit agreements provide for commitment and other fees in
accordance with standard banking practice, and contain certain
restrictive covenants relating to net worth, working capital and
other matters. Assets pledged as collateral under the
agreements, principally deposit accounts, accounts receivable,
equipment and inventories, had a net book value of $118,230 at
December 31, 1994. At December 31, 1994, there were no
borrowings outstanding under the agreements and the Company was
in compliance with all covenants.
The Company is contingently liable under standby letters of
credit totaling $7,961 at December 31, 1994, issued in the
normal course of business. These outstanding letters of credit
reduce the amount available for borrowing under the Company's
credit agreements.
Accounts Payable
Checks written which have not yet been presented for payment are
included in accounts payable. These amounts were approximately
$3,900 and $13,600 at December 31, 1994 and 1993, respectively.
<PAGE>
Long-term Obligations
Long-term obligations consist of the following:
1994 1993
Term note $ - $15,000
Industrial development bond, 3.85% due 1998 1,063 1,346
Equipment financing agreements and capitalized
lease obligations 5.5% to 8.75%, due 1995-
1998 290 1,078
Subordinated debentures, 6.5%, due 1999 784 891
Real estate mortgage, 8.5%, due 1998 152 197
Promissory notes, 10%, due 2003 572 614
2,861 19,126
Less current portion 662 853
$2,199 $18,273
Required principal repayments for the years 1995 through 1999
are as follows: $662, $552, $627, $464 and $256, respectively.
Financing agreements contain restrictive covenants relating to
working capital, net worth and other matters. Properties and
equipment with a net book value of $4,222 at December 31, 1994,
are pledged as collateral for real estate mortgages, industrial
development bonds and equipment financing agreements.
Operating Leases
The Company leases office space, production facilities and
equipment under various operating leases. At December 31, 1994,
future minimum rental payments applicable to noncancellable
operating leases were as follows:
1995 $ 2,933
1996 2,874
1997 2,783
1998 2,613
1999 1,566
After 1999 5,404
$18,173
For the years 1994, 1993 and 1992, rental expense amounted to
$2,861, $1,568 and $0 respectively.
Restricted Stock, Stock Options and Warrants
Under the provisions of the Company's Executive Stock Plan the
Board of Directors can grant nonqualified stock options and
restricted stock for up to 500,000 shares to key executives at
the current market price on the date of the grant. No options
Restricted Stock, Stock Options and Warrants, continued
may be granted after April 15, 1995. The right to exercise
options granted vests 25 percent on each of the first four
annual anniversary dates of the grant and expires no later than
10 years from the date of award. Restrictions on restricted
stock are progressively removed based on achievement of earnings
per share performance goals.
At December 31, 1994 the market value of the restricted shares
in issue amounted to $736 which has been recorded as "Unearned
compensation," a component of stockholders' equity (offset by an
identical increase in paid-in capital). Unearned compensation
will be amortized as the performance goals are met and charged
to general and administrative expenses, or reversed in
conjunction with any forfeitures of restricted shares.
Performance goals with respect to 1994 were not met and no
amounts were amortized in 1994. In accordance with plan
provisions, 27,600 restricted shares, with a market value of
$276, were forfeited and returned to the Company in March of
1995.
Activity under the plan was as follows:
1994 1993
Stock options:
Granted in year 116,000 126,000
Outstanding at December 31 421,300 310,300
Exercisable at December 31 184,675 110,850
Option prices per share when
granted $8.50/$15.50 $8.50/$15.50
Restricted shares:
Awarded in year - 92,000
Reverted to company in year 18,400 -
Issued and outstanding at December 31 73,600 92,000
Shares available for grant at
December 31: 5,100 97,700
In 1993, stock warrants were issued, expiring in 1998, for
300,000 shares exercisable at $9.0813 per share in conjunction
with renewal of the Company's principal credit agreement.
In 1994, 100,000 shares of restricted stock with a market value
of $969 were contributed to the Company's defined benefit
pension plan.
Other Income
Included in miscellaneous, net in 1993, is a gain in the amount
of $7,243 on sale of the Company's headquarters property. In
1992, this category included interest income in the amount of
$1,355, allowed with respect to an income tax refund and a gain
in the amount of $1,464 with respect to the termination of a
lease of a former ship repair facility.
Discontinued Operations and Restructuring
During 1994, plans were developed to dispose of the Company's
nonconstruction operations and to restructure and focus on its
core construction and related businessses. The Company's
principal manufacturing subsidiary, Lake Center Industries,
Inc., was sold on December 8, 1994; its pipe distribution
business, Comco Pipe & Supply Company, was sold on November 30,
1994; and its producing oil and gas investments were sold on
August 23, 1994. The results of operations of these businesses
are shown separately in the income statement as "income from
discontinued operations" for each of the years presented. The
balance sheets of the Company at December 31, 1994 and December
31, 1993 have not been restated.
The summarized results of discontinued operations were as
follows:
1994 1993 1992
Revenue $170,495 $173,554 $145,555
Income from discontinued
operations before taxes $ 6,060 $ 7,818 $ 2,948
Provision for income taxes 2,822 2,753 692
Income from discontinued
operations $ 3,238 $ 5,065 $ 2,256
Gain on disposal of dis-
continued operations before
taxes $ 58,969 - -
Provision for income taxes 22,103 - -
Gain on disposal of dis-
continued operations $ 36,866 $ - $ -
Income per share of common
stock from discontinued
operations $0.36 $0.58 $0.26
Gain on disposal of dis-
continued operations per
share of common stock $4.16 $ - $ -
In the fourth quarter of 1994, a restructuring program was put
into place. This program is designed to reduce the Company's
cost structure, improve productivity and competitiveness, and to
enhance the Company's information systems. Restructuring
charges in 1994, amounting to $4,169 are made up of the
following:
Reductions in staffing levels $2,290
Consolidation of offices and facilities 698
Abandonment of non-productive assets 1,181
$4,169
<PAGE>
Income Taxes
Details of the Company's consolidated tax provisions (net of
amounts allocated to discontinued operations) and loss from
continuing operations before extraordinary items and cumulative
effect of changes in accounting are as follows:
1994 1993 1992
Loss from continuing operations
before provision for income taxes,
extraordinary item and cumulative
effect of changes in accounting:
United States $(62,969) $(15,710) $(1,448)
Foreign 2,188 8,406 777
(60,781) (7,304) (671)
Provision (benefit) for income taxes:
Federal:
Current (1) (12,379) (3,277) (866)
Deferred 1,350 1,115 -
State 1,170 500 153
Foreign:
Current 606 2,404 3,810
Deferred 495 614 (2,989)
(8,758) 1,356 108
Loss from continuing
operations before extraordinary
item and cumulative effect
of changes in accounting $(52,023) $ (8,660) $ (779)
(1) The current benefit in 1994 is attributable to the
intraperiod allocation of taxes to the gain on disposal of
discontinued operations, see "Discontinued Operations and
Restructuring."
The provisions for income taxes are different than the amounts
computed by applying the statutory federal income tax rate of 34
percent. The differences are summarized below:
1994 1993 1992
Benefit at statutory rates $(20,666) $(2,483) $ (228)
U.S. losses for which no
tax benefit was recorded 13,555 5,541 316
Foreign taxes (390) 1,186 1,037
State income taxes 772 330 101
Nondeductible expenses 68 79 64
Reconciliation of previous
tax estimates - (1,404) -
Tax reimbursements from
discontinued operations (2,097) (1,893) (1,182)
Provision (benefit) for
income taxes $ (8,758) $ 1,356 $ 108
Income Taxes, continued
No provision has been made for additional income taxes on
undistributed earnings of a foreign subsidiary (which totaled
$35,578 at December 31, 1994) because of reinvestment policies
and the availability of tax credits if and when such earnings
are remitted to the parent Company.
In 1993, the Company adopted SFAS 109, "Accounting for Income
Taxes," and recorded a gain of $12,070 represented by an
increase in deferred income tax assets of $33,016, less a
valuation allowance of $20,946.
The components of net deferred income tax assets were as
follows:
1994 1993
Temporary differences:
Contract recognition
method for tax purposes $ (3,985) $ (788)
Depreciation 570 1,547
Estimated losses and
reserves 9,602 (507)
Employee benefits (676) 635
Inventory cost
capitalization 54 675
Other 175 (287)
5,740 1,275
Operating loss carryforward 13,633 20,769
Foreign tax credits 8,266 11,094
Alternative minimum tax
carryforward 1,044 1,044
Deferred income tax asset 28,683 34,182
Less, valuation allowance 28,572 23,366
Deferred income tax asset,
net $ 111 $10,816
Deferred income taxes are classified in the consolidated
balance sheet as follows:
1994 1993
Deferred income taxes - current $ 23 $ (342)
Deferred income taxes - long-term 88 11,158
$ 111 $10,816
The standard provides that deferred income tax benefits be
reduced by a valuation allowance with respect to any benefits
that, based on available evidence, are not expected to be
realized. The gain recorded upon adoption of SFAS 109 was based
on tax strategies which included the sale of those assets
associated with discontinued operations. During 1994 those
strategies were implemented and the related gains recognized.
As required by the standard, the Company has evaluated the
available evidence as defined by SFAS 109, and has increased the
valuation allowance.
<PAGE>
Income Taxes, continued
The Company's net operating loss carryforwards,
(NOL); and foreign tax credits, (FTC) expire as follows:
Year NOL FTC
1995 $ - $8,266
2004 27,335 -
2006 5,735 -
2007 3,369 -
2008 3,660 -
$40,099 $8,266
Employees' Pension and Retirement Plans
The Company maintains defined benefit pension plans covering
substantially all U.S. salaried employees and certain hourly
employees. Benefits are generally based on years of service and
compensation during the last five years of employment. The
Company's funding policy is to contribute annually amounts
deductible for income tax purposes. The Company also
maintains defined contribution plans covering salaried and
certain hourly employees. Participation in the programs is
generally voluntary and the Company matches employee
contributions, based on covered payroll, up to specified limits.
In addition, the Company provides an excess benefit plan for
defined benefits in excess of qualified plan limits imposed by
federal tax law.
<PAGE>
Employees' Pension and Reirement Plans, continued
The following table sets forth the defined benefit plans' funded
status and amounts recognized in the Company's financial
statements:
1994 1993
Actuarial present value of benefit
obligations:
Accumulated benefit obligation:
Nonvested $ 3,097 $ 616
Vested 11,447 24,352
$14,544 $24,968
Projected benefit obligation for
service rendered to date $16,414 $31,128
Plans' assets at fair market value,
primarily listed stocks and bonds,
including $1,000 in restricted shares
of common stock of Guy F. Atkinson
Company of California 12,379 24,620
Excess of projected benefit obligation
over plans' assets 4,035 6,508
Unrecognized net loss from past experience
different from that assumed and effects
of changes in assumptions (4,042) (9,380)
Remaining portion of unrecognized net
assets at January 1, 1986, being recognized
over approximately 13 years 263 495
Adjustment to recognize minimum liability 1,909 3,254
Accrued pension expense $ 2,165 $ 877
Net pension expense included
the following components:
1994 1993 1992
Service cost - benefits earned
during the period $ 1,224 $ 1,539 $ 1,473
Interest cost on projected
benefit obligation 1,255 1,738 1,307
Actual return on plan assets 416 (1,352) (1,109)
Net amortization and deferral (1,127) (40) (122)
Net pension expense $ 1,768 $ 1,885 $ 1,549
The following assumptions were used in computing the funded
status of the plans:
1994 1993
Discount rate 8.5% 7.25%
Expected long-term rate of return on
plan assets 9% 9%
Rate of increase in future compensation
levels 4.5% 4.5%
<PAGE>
Employees' Pension and Retirement Plans, continued
In accordance with Statement of Financial Accounting Standards
No. 87, the Company has recorded an additional minimum pension
liability to reflect the excess of accumulated benefits over the
fair market value of plan assets. A corresponding amount has
been recorded as an intangible pension asset, except to the
extent that the additional minimum liability exceeds related
unrecognized prior service costs, in which case the excess is
charged to stockholders' equity.
The following pension assets and liabilities were recorded in the
balance sheet:
1994 1993
Additional minimum pension liability $1,909 $3,254
Intangible pension asset 1,909 2,449
Charge to stockholders' equity $ - $ 805
The Company contributes to defined contribution retirement plans
and various defined benefit multiemployer plans on behalf of
unionized employees. Prefunded company contributions relative to
a defined contribution plan in the amount of $354 are included in
other current assets.
Costs of these plans were as follows:
1994 1993 1992
Defined benefit multiemployer
plans $4,835 $3,358 $3,463
Defined contribution retirement
plans 981 2,122 2,004
$5,816 $5,480 $5,467
Supplementing pension benefits, the Company provides certain
health care benefits for retired salaried employees reaching
retirement age while working with the Company.
The following table sets forth the components of postretirement
benefit liability:
1994 1993
Accumulated postretirement benefit
obligation:
Retirees $5,072 $6,045
Fully eligible employees 507 739
Other active plan participants 384 526
5,963 7,310
Unrecognized net gain (loss) 752 (398)
Accrued postretirement obligation $6,715 $6,912
<PAGE>
Employees' Pension and Retirement Plans, continued
Net postretirement health care expense included the following
components:
1994 1993
Service costs-benefits earned
during the period $ 62 $ 60
Interest cost on accumulated
postretirement benefit
obligation 462 530
Net postretirement benefit cost $ 524 $ 590
The significant assumptions used in determining postretirement
benefit cost and the accumulated postretirement benefit
obligation were as follows:
1994 1993
Discount rate 8.5% 7.25%
Medical care trend rate 10% in 1994 14% in 1993
reducing to reducing to
5% in 2004 6% in 2004
In 1992, the Company recognized costs for retiree health care
benefits as claims were paid; expenses amounted to $1,276.
Postemployment Benefits
The Company provides certain postemployment benefits, such as
self-insured disability benefits to former and inactive
employees. The liability for postemployment benefits was $936 at
December 31, 1994. There was no corresponding liability at
December 31, 1993 as, prior to 1994, the Company recognized costs
of postemployment benefits as claims were paid.
<PAGE>
Geographic Area Information (in millions of dollars)
The Company operated in the following geographic areas:
1994 1993 1992
Revenue:
United States $389.0 $279.0 $267.9
Canada 16.7 33.8 25.8
Other areas 17.3 32.2 27.3
$423.0 $345.0 $321.0
Operating profit (loss):
United States $(41.0) $(12.1) $ 8.6
Canada 2.1 2.1 (2.5)
Other areas 1.7 6.9 2.3
(37.2) (3.1) 8.4
General corporate expenses, net (18.7) (.7) (6.0)
Interest expense (4.9) (3.5) (3.1)
Income from continuing operations
before taxes, extraordinary
item and cumulative effect of
change in accounting $(60.8) $ (7.3) $ (0.7)
Identifiable assets:
United States $ 98.6 $198.2 $198.6
Canada 15.4 31.5 26.8
Other areas 10.7 10.6 4.8
Corporate assets 75.0 31.6 30.0
Total assets $199.7 $271.9 $260.2
Operating profit (loss) is total revenue less operating expenses,
excluding corporate general and administrative expense, corporate
other income - net, interest expense, and income taxes.
Identifiable assets by geographic area are those that are used in
the Company's operations in each area. Corporate assets are
principally cash and short-term investments, accrued and deferred
income taxes, and corporate properties and equipment.
The Company derived 5 percent in 1994, 4.3 percent in 1993 and 4
percent in 1992, of total revenue from contracts with the U.S.
government.
<PAGE>
Quarterly Financial Data (unaudited)
Quarterly results of operations, restated for discontinued
operations, for the years ended December 31, 1994, 1993, and 1992
are set out below.
First Second Third Fourth
1994 Quarter Quarter Quarter Quarter
Revenue $127,171 $123,429 $109,942 $ 62,427
Gross margin 5,849 7,036 1,908 (28,873)
(Loss) from continuing
operations before
cumulative effect of
changes in accounting (2,129) (2,664) (7,700) (39,530)
Income (loss) from dis-
continued operations 1,371 1,670 396 (199)
Gain on disposal of dis-
continued operations - - 2,611 34,255
(Loss) before
cumulative effect of
changes in accounting (758) (994) (4,693) (5,474)
Cumulative effect of
changes in accounting (739) - - -
Net (loss) $ (1,497) $ (994) $ (4,693) $ (5,474)
(Loss) per share of common
stock from continuing
operations before
cumulative effect of
changes in accounting $(0.24) $(0.30) $(0.87) $(4.45)
Income per share of
common stock from dis-
continued operations 0.15 0.19 0.34 3.84
(Loss) per share
of common stock before
cumulative effect of
changes in accounting (0.09) (0.11) (0.53) (0.61)
Cumulative effect of
changes in accounting
per share of common
stock (0.08) - - -
Net (loss) per
share of common stock $(0.17) $(0.11) $(0.53) $(0.61)
<PAGE>
Quarterly Financial Data (unaudited), continued
First Second Third Fourth
1993 Quarter Quarter Quarter Quarter
Revenue $ 82,025 $ 70,908 $ 89,497 $102,606
Gross margin 4,518 5,895 5,376 2,940
(Loss) from continuing
operations before
cumulative effect of
changes in accounting (487) (1,277) (758) (6,138)
Income from discontinued
operations 1,617 1,581 841 1,026
Income (loss) before
cumulative effect of
changes in accounting 1,130 304 83 (5,112)
Cumulative effect of
changes in accounting 4,974 - - -
Net income (loss) $ 6,104 $ 304 $ 83 $ (5,112)
(Loss) per share of common
stock from continuing
operations before
cumulative effect of
changes in accounting $(0.05) $(0.15) $(0.09) $(0.70)
Income per share of
common stock from dis-
continued operations 0.18 0.18 0.10 0.12
Income (loss) per share
of common stock before
cumulative effect of
changes in accounting 0.13 0.03 0.01 (0.58)
Cumulative effect of
changes in accounting
per share of common
stock 0.57 - - -
Net income (loss) per
share of common stock $0.70 $0.03 $0.01 $(0.58)
<PAGE>
Quarterly Financial Data (unaudited), continued
First Second Third Fourth
1992 Quarter Quarter Quarter Quarter
Revenue $ 85,093 $ 86,012 $ 79,425 $ 70,433
Gross margin 8,348 7,925 6,404 7,625
Income (loss) from
continuing operations
before extraordinary
item (300) (552) 359 (286)
Income (loss) from dis-
continued operations 578 1,018 (263) 923
Income before
extraordinary item 278 466 96 637
Extraordinary gain (loss) 250 (37)
Net income $ 278 $ 466 $ 346 $ 600
Income (loss) per share
of common stock from
continuing operations
before extraordinary
item $(0.04) $(0.06) $0.04 $(0.03)
Income (loss) per share
of common stock from dis-
continued operations 0.07 0.11 (0.03) 0.11
Income per share of
common stock before
extraordinary item 0.03 0.05 0.01 0.08
Extraordinary gain (loss)
per share of common
stock - - 0.03 (0.01)
Net income per share
of common stock $0.03 $0.05 $0.04 $0.07
Subsequent Event
On February 28, 1995, the Company declared a dividend of $2.00
per share of common stock, payable on March 31, 1995 to
shareholders of record on March 15, 1995. This dividend will
result in a reduction in cash and short-term investments of
approximately $17,846, with a corresponding reduction in
stockholders' equity.
Litigation and Contingencies
On March 7, 1995, a complaint asserting breach of contract and
other wrongdoing in connection with the Company's sale of its
manufacturing subsidiary, Lake Center Industries, Inc., was filed
against the Company and its financial advisor by an unsuccessful
bidder for Lake Center. The plaintiffs allege they have suffered
actual damages of $290 in connection with preparing their bid,
and also seek to recover $7,000 on a theory of unjust enrichment
together with an additional $10,000 in punitive damages. The
Company will vigorously defend this suit, which it believes to be
without merit, and further believes that the outcome will not
have a material adverse effect on its financial condition.
<PAGE>
GUY F. ATKINSON COMPANY OF CALIFORNIA
AND CONSOLIDATED SUBSIDIARIES
SCHEDULE IX - SHORT-TERM BORROWINGS (1)
YEARS ENDED December 31, 1994, 1993 & 1992
December 31, December 31, December 31,
(thousands of dollars) 1994 1993 1992
Balance at end of period $ - $35,715 $40,000
Weighted average interest
rate at end of period - 5.8% 6.0%
Maximum amount outstanding
during the period (2) $41,901 $43,881 $47,226
Average amount outstanding
during the period (2) $34,175 $37,980 $43,425
Weighted average interest
rate during the period (2) 6.11% 6.0% 6.3%
(1) Short-term borrowings are borrowings under bank lines of
credit.
(2) Maximum and average amounts outstanding and weighted average
interest rates are based on amounts borrowed and interest
rates in effect at months' ends during the respective years.
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Description
2 Agreement of Merger and Plan of
Reorganization dated as of April 22,
1994 between the Company and Guy F.
Atkinson Company of California, a
California corporation, for the purpose
of merging to reincorporate the
California company in the state of
Delaware.
3.1 Certificate of Incorporation of the
Company, filed as an exhibit to the
Form 10-Q of the Company for the period
ended March 31, 1994 (File No. O-3062)
and incorporated herein by reference.
3.2 Bylaws of the Company, filed as an
exhibit to the Form 10-Q of the Company
for the period ended March 31, 1994
(File No. O-3062) and incorporated
herein by reference.
4 Stockholder Rights Agreement, dated as
of May 9, 1994, between the Company and
The Bank of New York, as Rights Agent
("Shareholder Rights Agreement"), filed
as an exhibit to the Form 8-A of the
Company filed on May 10, 1994 (File No.
O-3062) and incorporated herein by
reference.
10.1 Loan Agreement and Guaranty Agreement,
dated December 23, 1991, relating to a
loan from the Guy F. Atkinson Company
Federal Credit Union and guaranteed by
Guy F. Atkinson Company, a Nevada
corporation, to William J. Carlson,
filed as Exhibit 10.1 to the Company's
1991 Form 10-K and incorporated herein
by reference.
10.2 Atkinson Corporate Management Incentive
Compensation Plan. Filed as Exhibit
10.4 to the Company's 1988 Form 10-K
and incorporated herein by reference.
10.3 Guy F. Atkinson Company of California
1990 Executive Stock Plan filed as
Exhibit 10.3 to the Company's 1990 Form
10-K and incorporated herein by
reference.
10.4 Guy F. Atkinson Company of California
Common Stock Purchase Warrant dated May
28, 1993 beween the Company and Morgan
Guaranty Trust Company filed as Exhibit
10.4 to the Company's 1993 Form 10-K
report and incorporated herein by
reference.
10.5 Employment Agreement dated as of April
21, 1994, between the Company and Jack
J. Agresti.
10.6 Continued Employment and Voluntary
Retirement Agreement dated April 21,
1994 between the Company and Thomas J.
Henderson.
10.7 Resignation Agreement and General
Release dated as of May 11, 1994,
between the Company and Christine V.
Braunlich.
21 Subsidiaries of the Company
24 Powers of Attorney of certain Directors
<PAGE>
EXHIBIT 2
AGREEMENT OF MERGER AND PLAN OF REORGANIZATION
THIS AGREEMENT OF MERGER AND PLAN OF REORGANIZATION
("Agreement") dated as of April 22, 1994 by and between GUY F.
ATKINSON COMPANY OF CALIFORNIA, a California corporation (the
"California Company") and GUY F. ATKINSON COMPANY OF CALIFORNIA,
a Delaware corporation (the "Delaware Company"),
WITNESSETH:
WHEREAS, the California Company is a corporation duly
organized, validly existing, and in good standing under the laws
of the State of California and, on the date of this Agreement,
has authority to issue 20,000,000 shares of Common Stock, without
par value, and has approximately 8,869,224 shares of Common Stock
issued and outstanding; and
WHEREAS, the Delaware Company is a corporation duly
organized, validly existing, and in good standing under the laws
of the State of Delaware and, on the date of this Agreement, has
authority to issue 22,000,000 shares, including 20,000,000 shares
of Common Stock, par value $.01 per share, and 2,000,000 shares
of Preferred Stock, par value $.01 per share, and has 100 shares
of Common Stock issued and outstanding, which are owned by the
California Company, and no shares of Preferred Stock issued and
outstanding; and
WHEREAS, the respective Boards of Directors of the
California Company and the Delaware Company have determined that
it is advisable and in the best interests of each of such
corporations that the California Company merge into the Delaware
Company under and pursuant to the General Corporation Laws of
Delaware and California and upon the terms and subject to the
conditions provided in this Agreement for the purpose of
effecting a reincorporation of the California Company in the
State of Delaware in a transaction qualifying as a reorganization
within the meaning of Section 368(a)(1)(F) of the Internal
Revenue Code and have, by resolutions duly adopted, approved this
Agreement and directed that it be submitted to a vote of their
respective shareholders and executed by the undersigned officers:
NOW THEREFORE, the parties agree as follows:
ARTICLE 1
Definitions
When used in this Agreement (and any Exhibit in which such
terms are not otherwise defined) the following terms shall have
the following meanings, respectively:
1.1 "California Common Stock" shall mean shares of Common
Stock, without par value, of the California Company.
1.2 "California GCL" shall mean the California General
Corporation Law.
1.3 "Delaware Common Stock" shall mean shares of Common
Stock, par value $.01 per share, of the Delaware Company.
1.4 "Delaware GCL" shall mean the Delaware General
Corporation Law.
1.5 "Effective Time" shall mean the date and time when the
Merger shall become effective, in accordance with Section 2.1.
1.6 "Merger" shall mean the merger of the California
Company into the Delaware Company.
1.7 "Surviving Corporation" shall mean the Delaware Company
from and after the Effective Time.
ARTICLE 2
Merger
2.1 Filings and Effectiveness. The Merger shall become
effective when the following actions shall have been completed:
(i) This Agreement and the Merger shall have
been adopted and approved (a) in accordance with the
California GCL by the shareholders of the California
Company and (b) in accordance with the Delaware GCL
by the California Company, as the sole stockholder
of the Delaware Company and;
(ii) All of the conditions precedent to the
consummation of the Merger specified in this
Agreement shall have been satisfied or duly waived
by the party entitled to satisfaction thereof;
(iii) An executed Certificate of Merger or an
executed counterpart of this Agreement shall have
been filed with the Secretary of State of the State
of Delaware; and
(iv) An executed Certificate of Merger or an
executed counterpart of this Agreement meeting the
requirements of the California GCL shall have been
submitted for filing with the Secretary of State of
the State of California.
2.2 Merger. At the Effective Time, the Merger shall become
effective under Section 252 of the Delaware GCL and Section
1108(d) of the California GCL, and the California Company shall
merge into the Delaware Company, the separate existence of the
California Company shall cease, and the Delaware Company shall
continue in existence under the Delaware GCL.
2.3 Effects. At the Effective Time:
(i) the separate existence of the California
Company shall cease and the California Company shall
be merged into the Delaware Company;
(ii) the Certificate of Incorporation of the
Delaware Company shall continue as the Certificate
of Incorporation of the Surviving Corporation until
changed or amended as provided by law;
(iii) the bylaws of the Delaware Company shall
continue as the bylaws of the Surviving Corporation
until amended as provided therein;
(iv) the directors of the California Company
in office on the Effective Date shall be and
continue as directors of the Surviving Corporation
until their successors are elected in accordance
with the Certificate of Incorporation and the bylaws
of the Surviving Corporation and are duly qualified;
(v) each officer of the California Company in
office on the Effective Date shall be and continue
as an officer of the Surviving Corporation and,
until their successors are elected or appointed in
accordance with the bylaws of the Surviving
Corporation and are duly qualified, such officers
shall hold the office in the same capacity of the
Surviving Corporation which they held before the
Merger;
(vi) each share of California Common Stock
outstanding immediately prior to the Effective Time
shall be converted into one share of Delaware Common
Stock pursuant to Article 3 below; and
(vii) without further transfer, act or deed,
the separate existence of the California Company
shall cease and the Surviving Corporation shall
possess all the rights, privileges, powers and
franchises of a public as well as of a private
nature, and shall be subject to all the
restrictions, disabilities and duties of the
California Company; and each and all of the rights,
privileges, immunities, powers and franchises of the
California Company, and all property, real, personal
and mixed, and all debts due to the California
Company on whatever account, stock subscriptions and
other things in action or belonging to the
California Company shall be vested in the Surviving
Corporation; and all property, rights, privileges,
powers and franchises, and each and every other
interest of the California Company shall be
thereafter as effectually the property of the
Surviving Corporation as they were of the California
Company; and the title to any real estate vested by
deed or otherwise, under the laws of the States of
Delaware or California or of any other jurisdiction,
in the California Company shall not revert or be in
any way impaired by reason of the Merger; but all
rights of creditors of the California Company and
all liens upon any property of the California
Company shall be preserved unimpaired and all debts,
liabilities and duties of the California Company
shall thenceforth attach to the Surviving
Corporation and may be enforced against it to the
same extent as if such debts, liabilities and duties
had been incurred or contracted by it.
2.4 Further Assurances. The California Company agrees that
if, at any time, or from time to time, after the Effective Time,
the Surviving Corporation shall consider or be advised that any
further deeds, assignments or assurances are necessary or
desirable to vest, perfect or confirm in the Surviving
Corporation title to any property, rights, privileges,
immunities, powers or franchises of the California Company, the
Surviving Corporation and its proper officers and directors may
execute and deliver all such proper deeds, assignments and
assurances and do all other things necessary or desirable to
vest, perfect or confirm title to such property, rights,
privileges, immunities, powers or franchises in the Surviving
Corporation and otherwise to carry out the purposes of this
Agreement, in the name of the California Company or otherwise.
ARTICLE 3
Conversion of Shares
3.1 Conversion of Shares. At the Effective Time, the
California Common Stock shall be converted into Delaware Common
Stock as follows:
(i) each share of California Common Stock
issued and outstanding immediately prior to the
Effective Time shall, by virtue of the Merger and
without any action on the part of the holder
thereof, be converted into one share of Delaware
Common Stock; and
(ii) each share of Delaware Common Stock
issued and outstanding immediately prior to the
Effective Time shall, by virtue of the Merger, be
retired and cease to exist and certificates
representing such shares shall be canceled and no
shares shall be issued in the Merger in respect
thereof.
3.2 Stock Certificates. At and after the Effective Time,
all of the outstanding certificates which immediately prior to
the Effective Time represent shares of California Common Stock
shall be deemed for all purposes to evidence ownership of, and to
represent, shares of Delaware Common Stock into which the shares
of California Common Stock formerly represented by such
certificates have been converted as provided in this Agreement.
The registered owner on the books and records of the Delaware
Company or its transfer agents of any such outstanding stock
certificate shall, until such certificate shall have been
surrendered for transfer or otherwise accounted for to the
Delaware Company or its transfer agents, have and be entitled to
exercise any voting and other rights with respect to, and to
receive any dividends and other distributions upon, the shares of
Delaware Common Stock evidenced by such outstanding certificate
as above provided.
3.3 Stock Options. Each right or option to purchase or
acquire shares of California Common Stock granted under the
California Company's 1990 Executive Stock Plan (the "Plan") which
is outstanding immediately prior to the Effective Time shall, by
virtue of the Merger and without any action on the part of the
holder thereof, be converted into and become a right or option to
purchase or acquire the same number of shares of Delaware Common
Stock at the same option price per share, and upon the same terms
and subject to the same conditions as set forth in the Plan, as
in effect at the Effective Time. The same number of shares of
Delaware Common Stock shall be reserved for purposes of the Plan
as is equal to the number of shares of California Common Stock so
reserved as of the Effective Time. As of the Effective Time, the
Delaware Company hereby assumes the Plan and all obligations of
the California Company under the Plan including the outstanding
options and rights granted pursuant to the Plan.
3.4 Validity of Delaware Common Stock. All shares of
Delaware Common Stock into which California Common Stock are to
be converted pursuant to the Merger shall not be subject to any
statutory or contractual preemptive rights, shall be validly
issued, fully paid and nonassessable and shall be issued in full
satisfaction of all rights pertaining to such California Common
Stock.
3.5 Rights of Former Holders. From and after the Effective
Time, no holder of certificates which evidenced California Common
Stock immediately prior to the Effective Time shall have any
rights with respect to the shares formerly evidenced by those
certificates, other than to receive the shares of Delaware Common
Stock into which such California Common Stock shall have been
converted pursuant to the Merger.
ARTICLE 4
Covenants To Be Performed Prior to Closing Date
4.1 Consents. Each of the California Company and the
Delaware Company shall use its best efforts to obtain the consent
and approval of each person (other than shareholders of the
California Company in their capacities as such) whose consent or
approval shall be required in order to permit consummation of the
Merger.
4.2 Governmental Authorizations. Each of the California
Company and the Delaware Company shall cooperate in filing any
necessary reports or other documents with any federal, state,
local or foreign authorities having jurisdiction with respect to
the Merger.
ARTICLE 5
Conditions
The obligations of the California Company and the Delaware
Company to consummate the Merger are subject to satisfaction of
the following conditions:
5.1 Authorization. The holders of a majority of the voting
power of the California Company shall have approved and adopted
this Agreement and the Merger at a meeting of the shareholders.
All necessary action shall have been taken to authorize the
execution, delivery and performance of this Agreement by the
California Company and the Delaware Company. The California
Company and the Delaware Company shall have full power and
authority to consummate the Merger.
5.2 Consents and Approvals. All authorizations, consents
and approvals (contractual or otherwise) of any state, federal,
local or foreign government agency, regulatory body or official
or any person (other than the California Company or the Delaware
Company) necessary for the valid consummation of the Merger in
accordance with this Agreement shall have been obtained and shall
be in full force and effect.
ARTICLE 6
Miscellaneous
6.1 Waiver and Amendment. This Agreement may be amended by
action of the respective Boards of Directors of the California
Company and the Delaware Company without action by the
shareholders or stockholders of the parties, except that any
amendment altering any terms of this Agreement if such alteration
would adversely affect the holders of any class or series of the
capital stock of the California Company or the Delaware Company
must be approved by a majority of the voting power of the
California Company.
6.2 Termination. This Agreement may be terminated and the
Merger and other transactions provided for by this Agreement
abandoned at any time prior to the Effective Time, whether before
or after adoption and approval of this Agreement by the
shareholders of the California Company, by action of the Board of
Directors of the California Company if the Board determines that
the consummation of the transactions contemplated by this
Agreement would not, for any reason, be in the best interests of
the California Company and its shareholders.
6.3 No Waiver. No waiver by any party of any condition, or
the breach of any term or covenant contained in this Agreement,
whether by conduct or otherwise, in any one or more instances,
shall be deemed to be a further or continuing waiver of any such
condition or breach or a waiver of any other condition or breach
of any other term or covenant contained in this Agreement.
6.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California
applicable to contracts entered into and to be performed wholly
within the State of California, except to the extent that the
laws of the State of Delaware are mandatorily applicable to the
Merger.
6.5 Approval of the California Company as the Sole
Stockholder of the Delaware Company. By its execution and
delivery of this Agreement, the California Company, as the sole
stockholder of the Delaware Company, consents to, approves and
adopts this Agreement and approves the Merger, subject to the
approval and adoption of this Agreement by the holders of a
majority of the voting power of the California Company pursuant
to Section 5.1. The California Company agrees to execute such
instruments as may be necessary or desirable to evidence its
approval and adoption of this Agreement and the Merger as the
sole stockholder of the Delaware Company.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed as of the date first above written.
CALIFORNIA COMPANY: GUY F. ATKINSON COMPANY OF
CALIFORNIA, a California
corporation
By: /s/ J. J. Agresti
Its: President
Attest:
/s/ Therese Ambrusko
Secretary and General Counsel
DELAWARE COMPANY: GUY F. ATKINSON COMPANY OF
CALIFORNIA, a Delaware
corporation
By: /s/ J. J. Agresti
Its: President
Attest:
/s/ Therese Ambrusko
Secretary and General Counsel
<PAGE>
EXHIBIT 10.5
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of April 21, 1994, by and
between Jack J. Agresti (the "Executive") and Guy F. Atkinson
Company of California, a Delaware corporation (the "Company").
1. Term of Employment.
(a) Basic Rule. The Company agrees to continue the
Executive's employment, and the Executive agrees to remain in
employment with the Company, from the date of this Agreement
until the third anniversary of such date (the "Term"), unless the
Executive's employment terminates earlier pursuant to Subsection
(b), (c) or (d) below. On each anniversary of the date of this
Agreement until the anniversary next following the Executive's
62nd birthday, the Term automatically shall be extended for an
additional year unless the Company or the Executive provides at
least three months' advance written notice to the other party
that an extension is not desired. If such written notice has not
been provided at least three months before the anniversary next
following the Executive's 62nd birthday, the Term shall be
extended to the first day of the month next following the
Executive's 65th birthday, and the Term shall not be subject to
further automatic extensions thereafter. Any waiver of notice
shall be valid only if it is made in writing and expressly refers
to the notice requirement of this Subsection 1(a).
(b) Death. In the event of the Executive's death during
the Term, (i) the Company shall continue to make the salary
payments described in Section 3 to the Executive's estate for one
year; (ii) the Company shall pro rate the targets and criteria
applicable to the Executive under the Company's Management
Incentive Compensation Plan and shall pay the Executive's estate
a pro rata bonus, if any, based on the Executive's satisfaction
of such pro rated targets and criteria prior to his death; and
(iii) the Executive's beneficiaries and estate shall be entitled
to receive the benefits of the various plans and insurance
coverages described in Sections 4 and 5 in accordance with the
terms of those plans and coverages, and applicable law. The pro
rata bonus described above, if any, shall be paid at the time
bonuses are otherwise paid pursuant to the Company's Management
Incentive Compensation Plan.
(c) Cause. The Company may terminate the Executive's
employment for Cause by giving the Executive 90 days' advance
written notice. For all purposes under this Agreement, "Cause"
shall mean (i) a willful failure by the Executive to
substantially perform his duties hereunder, other than a failure
resulting from the Executive's complete or partial incapacity due
to physical or mental illness or impairment, (ii) a willful act
by the Executive which constitutes gross misconduct or fraud and
which is materially injurious to the Company or (iii) conviction
of, or a plea of "guilty" or "no contest" to, a felony. No act,
or failure to act, by the Executive shall be considered "willful"
unless committed without good faith and without a reasonable
belief that the act or omission was in the Company's best
interest.
(d) Incapacity. In the event that the Executive becomes
unable to substantially perform his duties hereunder due to the
Executive's complete or partial incapacity due to physical or
mental illness or impairment, the Executive shall remain entitled
to the compensation and benefits described in Sections 3 through
5 for one year after the date of such incapacity, including a pro
rated bonus for the period prior to the Executive's incapacity
determined in the manner described in Section 1(b).
(e) Termination of Agreement. This Agreement shall
terminate when all obligations of the parties hereunder have been
satisfied.
2. Duties and Scope of Employment.
(a) Position. The Company agrees to employ the Executive
as its President and Chief Executive Officer throughout the Term.
The Executive shall report to the Company's Board of Directors.
(b) Obligations. During the Term, the Executive shall
devote his full business efforts and time to the Company and its
subsidiaries and shall not render services to any other person or
entity without the prior written consent of the Company's Board
of Directors. The foregoing, however, shall not preclude the
Executive from engaging in appropriate civic, charitable or
religious activities or from devoting a reasonable amount of time
to private investments that do not interfere or conflict with his
responsibilities to the Company.
3. Base Compensation.
During the Term, the Company agrees to pay the Executive as
compensation for his services a base salary at the annual rate of
$375,000 or at such higher rate as the Company's Board of
Directors may determine from time to time. Such salary shall be
payable in accordance with the Company's standard payroll
procedures. The Executive's salary shall not be reduced unless
such reduction is proportionate to an overall salary adjustment
program adopted by the Company's Board of Directors. (The annual
compensation specified in this Section 3, together with any
increases in such compensation that the Board of Directors may
grant from time to time, is referred to in this Agreement as
"Base Compensation.")
4. Employee Benefits.
(a) In General. During the Term, the Executive shall be
eligible to participate in the employee benefit plans and
executive compensation programs maintained by the Company,
conditions of the plan or program in question and to the
determination of any person or committee administering such plan
or program.
(b) 1994 Grant of Stock Options. Effective April 21, 1994,
the Executive shall receive a grant of options covering 40,000
shares of the Company under the Guy F. Atkinson Company of
California 1990 Executive Stock Plan, subject to the generally
applicable terms and conditions of such Plan.
(c) Management Incentive Compensation Plan. The Executive
shall be eligible to participate in the Company's Management
Incentive Compensation Plan, subject to the generally applicable
terms and conditions of such Plan, modified as follows: (i) for
the first 12 months of the Term, 100% of the target incentive
shall be discretionary; and (ii) for the remaining Term, 50% of
the target incentive shall be discretionary and 50% shall be
based on objective performance criteria over which the Executive
has substantial control, as determined by the Company's
Compensation Committee.
(d) Supplemental Pension. If the Executive's employment
with the Company and any affiliates terminates before age 65 for
any reason other than Cause, death, incapacity or voluntary
resignation without Good Reason (as defined in Section 6(b)), the
Executive shall be entitled to a monthly benefit equal to the
difference between (i) the Executive's actual monthly benefits
payable under the Atkinson 1987 Pension Plan and the Excess-Benefit
Plan of Guy F. Atkinson Company of California and
Participating Companies and (ii) the monthly benefits that would
be payable under such Plans if the Executive were age 65. The
monthly benefit determined under this Section 4(d) shall be
payable to the Executive or to any other person who is receiving
benefits under the Atkinson 1987 Pension Plan with respect to the
Executive, and shall be paid at the same times and in the same
form as the monthly benefit under the Atkinson 1987 Pension Plan.
(e) No Reduction in Aggregate Company-Provided Benefits.
During the Term and after termination of the Executive's
employment for any reason other than Cause or voluntary
resignation without Good Reason (as defined in Section 6(b)), the
aggregate employee benefits provided to the Executive, including
retiree health benefits, as measured by the cost of such benefits
to the Company at the date of this Agreement (or as may be
increased at any time in the future) shall not be reduced.
5. Other Perquisites.
During the Term, the Company shall provide the Executive
with the following:
(a) A Company automobile and payment for all maintenance
and fuel for such automobile;
(b) Excess term life insurance in the amount of $1,000,000;
(c) Long-term disability coverage providing a monthly
benefit of at least $12,000;
(d) Payment for an annual physical examination and all
related expenses (including the cost of any tests or laboratory
work) by a physician of the Executive's choice; and
(e) Payment for monthly membership dues at the World Trade
Club, the Bankers Club and the Peninsula Golf and Country Club.
6. Change in Control.
(a) Definition. For all purposes under this Agreement,
"Change in Control" shall mean the occurrence of any of the
following events after the date of this Agreement:
(i) The acquisition, other than from the Company
(which term for purposes of this paragraph includes any
successor corporation), or any subsidiary thereof by any
"person" (as the term person is used for purposes of
Sections 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act")) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the 1934
Act) of securities with voting power equal to 30% or more of
the combined voting power of the Company's then outstanding
voting securities; or
(ii) The individuals who, as of the date of this
Agreement, are members of the Board of Directors of the
Company and who have remained members of the Board (the
"Incumbent Board"), cease for any reason to constitute at
least one-half of the Board; provided, however, that if the
election, or nomination for election by the Company's
stockholders, of any new director was approved by a vote of
at least one-half of the directors who then constitute the
Incumbent Board, such new director shall be considered a
member of the Incumbent Board; or
(iii) Approval by stockholders of the Company of (1) a
merger or consolidation of the Company with or into another
corporation if the stockholders of the Company, immediately
before such merger or consolidation do not, immediately
after such merger or consolidation, own, directly or
indirectly, more than two-thirds of the combined voting
power of the then outstanding voting securities of the
corporation resulting from such merger or consolidation in
substantially the same proportion as their ownership of the
combined voting power of the voting securities of the
Company outstanding immediately before such merger or
consolidation or (2) dissolution of the Company or an
agreement for the sale or other disposition of all or
substantially all of the assets of the Company.
Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because 30% or more of the combined
voting power of the Company's then outstanding securities is
acquired by (i) a trustee or other fiduciary holding securities
under one or more employee benefit plans maintained by the
Company or any of its subsidiaries or (ii) any corporation which,
immediately prior to such acquisition, is owned directly or
indirectly by the stockholders of the Company in the same
proportion as their ownership of stock in the Company immediately
prior to such acquisition.
For purposes of this Subsection, the stockholders of the
Company are deemed to be the indirect owners of any assets,
including stock interests, held by the Company or any subsidiary
thereof.
(b) Good Reason. For all purposes under this Agreement,
"Good Reason" shall mean that (i) the Executive has been demoted,
(ii) the Executive has incurred a material alteration in his
authority or responsibility, (iii) the Executive has incurred a
reduction in his Base Compensation or aggregate company-provided
benefits; or (iv) the Company's principal executive offices have
been relocated more than 35 miles from their present location.
(c) Involuntary Termination Without Cause or Voluntary
Termination With Good Reason. If, during the Term and within two
years after the occurrence of a Change in Control, the Executive
voluntarily resigns his employment for Good Reason or the Company
terminates the Executive's employment for any reason other than
Cause; then the Executive shall be entitled to receive all of the
payments and benefit coverage described in this Section 6. Such
payments and benefit coverage shall continue for the period
commencing on the date when the employment termination is
effective and ending on the earlier of (i) the third anniversary
of such date or (ii) the date of the Executive's death (the
"Continuation Period").
(d) Base Compensation. During the Continuation Period, the
Company shall pay the Executive, in accordance with Section 3,
the sum of:
(i) His Base Compensation at the annual rate in effect
on the date of the employment termination; plus
(ii) The average annual bonus awarded to the Executive
by the Company for the most recent three fiscal years for
which bonuses have been determined prior to the date of the
employment termination. For this purpose, if the Company
has determined that no bonus shall be awarded to the
Executive for a fiscal year, such bonus shall be included in
the calculation as zero.
(e) Insurance Coverage. During the Continuation Period,
the Executive (and, where applicable, his dependents) shall be
entitled to continue participation in the group life and health
insurance plans maintained by the Company, as if he were still an
employee of the Company. Where applicable, the Executive's
salary for purposes of such plans shall be deemed to be equal to
his Base Compensation. To the extent that the Company finds it
impossible to cover the Executive under its group insurance
policies during the Continuation Period, the Company shall
provide the Executive with the same level of coverage at the same
cost under individual policies.
(f) Incentive Programs. To the extent the relevant plans
and programs do not provide for accelerated vesting upon a Change
in Control, the Continuation Period shall be counted as
employment with the Company for purposes of vesting under all
executive compensation programs maintained by the Company,
including (without limitation) incentive compensation, deferred
compensation, bonus, stock option, stock appreciation rights,
restricted stock, phantom stock or similar plans maintained by
the Company, but including any pension, thrift or profit-sharing
plan intended to qualify under section 401(a) of the Internal
Revenue Code of 1986, as amended (the "Code") only to the extent
similarly situated employees may participate in accordance with
the Company's generally applicable severance policy. The
preceding sentence shall not be construed to require the Company
to grant any new awards to the Executive under such executive
compensation programs during the Continuation Period. The
Continuation Period shall also be counted as employment with the
Company for purposes of determining the expiration date of any
stock option granted by the Company and held by the Executive
when his employment terminates. If any of the Executive's
restricted stock has not vested by the end of the Continuation
Period, the Compensation Committee of the Company shall exercise
its discretion to vest the restricted stock at that time.
(g) No Mitigation. The Executive shall not be required to
mitigate the amount of any payment or benefit contemplated by
this Section 6, nor shall any such payment or benefit be reduced
by any earnings or benefits that the Executive may receive from
any other source.
7. Limitation on Payments.
(a) Basic Rule. Notwithstanding any contrary provision of
this Agreement, the Company shall not be required to make any
payment or property transfer to, or for the benefit of, the
Executive (under this Agreement or otherwise) that would subject
the Executive to the excise tax described in section 4999 of the
Code, if, after the application of this Section 7, the present
value of his aggregate payments or property transfers from the
Company will be greater than the present value of his payments or
property transfers from the Company would have been if (i) this
Section 7 did not apply and (ii) such present value had been
reduced by the amount of the excise tax described in section 4999
of the Code. In all other cases, this Section 7 shall not apply
to the Executive. All determinations under this Subsection (a)
shall be made by the independent auditors retained by the Company
most recently prior to the Change in Control (the "Auditors")
based on information supplied by the Company and the Executive,
and shall be binding on the Company and the Executive. All fees
and expenses of the Auditors shall be paid by the Company.
(b) Reductions. If the amount of the aggregate payments or
property transfers to the Executive must be reduced under this
Section 7, then the Executive shall direct in which order the
payments or transfers are to be reduced, but no change in the
timing of any payment or transfer shall be made without the
Company's consent. As a result of uncertainty in the application
of section 4999 of the Code at the time of an initial
determination by the Auditors hereunder, it is possible that a
payment will have been made by the Company that should not have
been made (an "Overpayment") or that an additional payment that
will not have been made by the Company could have been made (an
"Underpayment"). In the event that the Auditors, based upon the
assertion of a deficiency by the Internal Revenue Service against
the Company or the Executive that the Auditors believe has a high
probability of success, determine that an Overpayment has been
made, such Overpayment shall be treated for all purposes as a
loan to the Executive that he shall repay to the Company,
together with interest at the applicable federal rate specified
in section 7872(f)(2) of the Code; provided, however, that no
amount shall be payable by the Executive to the Company if and to
the extent that such payment would not reduce the amount that is
subject to an excise tax under section 4999 of the Code. In the
event that the Auditors determine that an Underpayment has
occurred, such Underpayment shall promptly be paid or transferred
by the Company to, or for the benefit of, the Executive, together
with interest at the applicable federal rate specified in section
7872(f)(2) of the Code.
8. Successors.
(a) Company's Successors. The Company shall require any
successor (whether direct or indirect and whether by purchase,
lease, merger, consolidation, liquidation or otherwise) to all or
substantially all of the Company's business and/or assets, by an
agreement in substance and form reasonably satisfactory to the
Executive, to assume this Agreement and to agree expressly to
perform this Agreement in the same manner and to the same extent
as the Company would be required to perform it in the absence of
a succession. The Company's failure to obtain such agreement
prior to the effectiveness of a succession shall be a breach of
this Agreement and shall entitle the Executive to all of the
compensation and benefits to which he would have been entitled
hereunder if the Company had involuntarily terminated his
employment without Cause immediately after such succession
becomes effective. For all purposes under this Agreement, the
term "Company" shall include any successor to the Company's
business and/or assets which executes and delivers the assumption
agreement described in this Subsection (a) or which becomes bound
by this Agreement by operation of law.
(b) Executive's Successors. This Agreement and all rights
of the Executive hereunder shall inure to the benefit of, and be
enforceable by, the Executive's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
9. Nondisclosure.
During the Term and at all times thereafter, the Executive
shall not, without the prior written consent of the Board,
disclose or use for any purpose (except in the course of his
employment under this Agreement and in furtherance of the
business of the Company) confidential information or proprietary
data of the Company, except as required by applicable law or
legal process; provided, however, that confidential information
shall not include any information known generally to the public
or ascertainable from public or published information (other than
as a result of unauthorized disclosure by the Executive) or any
information of a type not otherwise considered confidential by
persons engaged in the same business or a business similar to
that conducted by the Company. The Executive agrees to deliver
to the Company at the termination of his employment, or at any
other time the Company may request, all memoranda, notes, plans,
records, reports and other documents (and copies thereof)
relating to the business of the Company which he may then possess
or have under his control.
10. Indemnification.
During the Term and at all times thereafter, the Company
shall indemnify the Executive to the fullest extent allowed by
law and in accordance with the Company's by-laws from any claims
or actions based upon any acts or omissions, or alleged acts or
omissions, of the Executive which arise out of or are related to
his employment with the Company. The Executive shall be a
beneficiary of any directors' and officers' liability insurance
policy maintained by the Company as long as the Executive remains
an officer or director.
11. Miscellaneous Provisions.
(a) Notice. Notices and all other communications
contemplated by this Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or when
mailed by U.S. registered mail, return receipt requested and
postage prepaid. In the case of the Executive, mailed notices
shall be addressed to him at the home address which he most
recently communicated to the Company in writing. In the case of
the Company, mailed notices shall be addressed to its corporate
headquarters, and all notices shall be directed to the attention
of its Secretary.
(b) Waiver. No provision of this Agreement shall be
modified, waived or discharged unless the modification, waiver or
discharge is agreed to in writing and signed by the Executive and
by an authorized officer of the Company (other than the
Executive). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by
the other party shall be considered a waiver of any other
condition or provision or of the same condition or provision at
another time.
(c) Whole Agreement. No agreements, representations or
understandings (whether oral or written and whether express or
implied) which are not expressly set forth in this Agreement have
been made or entered into by either party with respect to the
subject matter hereof.
(d) No Setoff; Withholding Taxes. There shall be no right
of setoff or counterclaim, with respect to any claim, debt or
obligation, against payments to the Executive under this
Agreement. All payments made under this Agreement shall be
subject to reduction to reflect taxes required to be withheld by
law.
(e) Choice of Law. The validity, interpretation,
construction and performance of this Agreement shall be governed
by the laws of the State of California.
(f) Severability. The invalidity or unenforceability of
any provision or provisions of this Agreement shall not affect
the validity or enforceability of any other provision hereof,
which shall remain in full force and effect.
(g) Mediation. Except as otherwise provided in Section 7,
any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be subject to nonbinding
mediation before either party may bring legal action.
(h) No Assignment. The rights of any person to payments or
benefits under this Agreement shall not be made subject to option
or assignment, either by voluntary or involuntary assignment or
by operation of law, including (without limitation) bankruptcy,
garnishment, attachment or other creditor's process, and any
action in violation of this Subsection (h) shall be void.
IN WITNESS WHEREOF, each of the parties has executed this
Agreement, in the case of the Company by its authorized officer,
as of the day and year first above written.
/s/ Jack J. Agresti
Executive
GUY F. ATKINSON COMPANY
OF CALIFORNIA
By /s/ James D. Stevens
Vice President
<PAGE>
EXHIBIT 10.6
CONTINUED EMPLOYMENT AND
VOLUNTARY RETIREMENT AGREEMENT
THIS CONTINUED EMPLOYMENT AND VOLUNTARY RETIREMENT AGREEMENT
(the "Agreement") is entered into by and between Thomas J.
Henderson ("Henderson") and Guy F. Atkinson Company of California
(the "Company") as of the date set forth below, and with
reference to the following facts:
A. Henderson is currently employed by the Company as
its Chief Executive Officer and is a member of the Company's
Board of Directors (the "Board"), and Henderson currently serves
as the Chairman of the Board;
B. Henderson has been employed continuously by the
Company or its subsidiaries or affiliates in various capacities
since October 1961;
C. It is now Henderson's desire to step down from his
position as Chief Executive Officer of the Company and to prepare
for his orderly retirement from the Company on April 1, 1996 (the
"Retirement Date"); and
D. It is now the Company's desire to reward Henderson
for his long and dedicated service, to retain him as a member of
the Board and as its Chairman, to continue to provide him with
his current compensation and aggregate level of benefits through
the Retirement Date, and to ensure his availability to assist the
Company on special projects through the Retirement Date.
In recognition of the foregoing facts and desires, Henderson and
the Company agree as set forth below.
1. Resignation: Henderson hereby resigns from his
position as Chief Executive Officer of the Company effective
April 21, 1994.
2. Continued Employment: Henderson's employment with the
Company will continue from the date of this Agreement until the
Retirement Date (the "Term"), at which time his employment with
the Company will voluntarily terminate as a result of his
retirement.
3. Position and Duties: During the Term, Henderson shall
hold the position of Chairman of the Board, and shall serve as a
member of the Company's Board (so long as he is duly elected to
membership on the Board by the Company's stockholders). In the
event that a majority of the members of the Board request that
Henderson resign from his position as Chairman at any time during
the Term, Henderson shall so resign. Henderson may voluntarily
elect to resign from his position(s) as a member of the Board
and/or as its Chairman at any time during the Term. Henderson's
resignation from either or both positions shall not affect his
continued employment with the Company or his right to receive the
compensation and benefits described in this Agreement during the
Term. Upon the Board's or the Chief Executive Officer's request,
Henderson agrees to make himself available at mutually convenient
times throughout the Term to perform special assignments or
projects which are appropriate and reasonable under the
circumstances.
4. Compensation and Benefits: During the Term, the
Company shall continue to provide Henderson with the same base
compensation and aggregate level of benefits which he is
currently receiving, including, but not limited to, the
following:
(a) continued payment of Henderson's salary in
accordance with the Company's normal payroll procedures at the
annual rate of $360,000.00, less applicable withholding;
(b) subject to Henderson's payment of the employee
portion of the premiums for such coverage, continued provision of
the Company's group health and dental insurance coverages
(including life insurance coverage); after the Retirement Date,
Henderson shall be entitled to such retiree health, medical and
dental insurance coverages as are provided by the Company to
similarly situated retirees in accordance with its policies in
effect from time to time;
(c) continued accrual and use of vacation, holiday and
sick pay in accordance with applicable Company policies;
(d) continued participation in the Atkinson 1987
Pension Plan, the Atkinson Retirement Stock and Investment Plan,
and the Excess-Benefit Plan of Guy F. Atkinson Company of
California and Participating Companies in accordance with the
terms of those plans; Henderson shall also remain entitled to all
vested benefits (including, but not limited to, any annuities)
which he has earned under any earlier pension or retirement plans
of the Company;
(e) with respect to the stock options and restricted
stock previously granted to Henderson by the Company pursuant to
the Guy F. Atkinson Company of California 1990 Executive Stock
Plan (the "Stock Plan"), Henderson's rights (including, but not
limited to, his right to continued vesting of his unvested stock
options during the Term, his right to exercise his vested stock
options for one year after the Retirement Date and his right to
accelerated vesting of his unvested stock options upon a change
of control at the Company as defined in the Stock Plan) and the
Company's obligations with respect to all such stock options and
restricted stock shall continue to be as stated in the Stock Plan
(as currently stated or as may be properly amended in the future)
and any applicable stock option and/or restricted stock
agreements between Henderson and the Company;
(f) continued provision of a Company automobile and
payment for all maintenance and fuel for such automobile;
(g) continued provision of the excess term life
insurance currently being provided to Henderson by the Company;
(h) payment for Henderson's annual physical
examination and all related expenses (including the cost of any
test or laboratory work) by a physician of Henderson's choice;
(i) continued payment of Henderson's monthly
membership dues at the California Golf Club;
(j) continued provision of travel accident insurance
coverage; and
(k) continued payment of Henderson's membership dues
at the World Trade Club.
Notwithstanding the foregoing, the Company may make changes in
its benefit plans and practices which are generally applicable to
similarly situated employees or former employees so long as there
is no reduction in the aggregate benefits provided to Henderson.
5. Termination: This Agreement may not be terminated by
the Company prior to the Retirement Date except as a result of a
material breach hereof by Henderson, and then only after written
notice to Henderson of that breach and a reasonable opportunity
to cure such breach. In the event of Henderson's death during
the Term, the Company shall continue to make the salary payments
described in paragraph 4(a) to Henderson's estate through the end
of the Term, and Henderson's beneficiaries and estate shall be
entitled to receive the benefits of the various plans and
insurance coverages described in paragraph 4 in accordance with
the terms of those plans and coverages, and applicable law. In
the event that Henderson becomes disabled during the Term, such
disability shall not be a material breach of this Agreement and
Henderson shall remain entitled to receive the compensation and
benefits described in paragraph 4.
6. Indemnification: During the Term and at all times
thereafter, the Company shall indemnify Henderson to the fullest
extent allowed by law and in accordance with the Company's by-laws
from any claims or actions based upon any acts or omissions,
or alleged acts or omissions, of Henderson which arise out of or
are related to his employment with the Company. Henderson shall
be a beneficiary of any directors' and officers' liability
insurance policy maintained by the Company as long as Henderson
remains a director or officer.
7. Successor Entities: In the event of any disposition of
the Company (whether by merger, transfer of assets, sale of stock
or otherwise), the Company shall require its successor to
expressly assume in writing the Company's obligations hereunder.
Any failure by the Company to obtain that written assumption
shall be a material breach of this Agreement.
8. Dispute Resolution: In the event of any dispute or
claim relating to or arising out of this Agreement or the
parties' employment relationship, all such disputes shall be
fully and finally resolved by binding arbitration conducted by
the American Arbitration Association in San Francisco,
California; provided, however, that this arbitration provision
shall not apply to any disputes or claims relating to or arising
out of the misuse or misappropriation, or alleged misuse or
misappropriation, of the Company's trade secrets or proprietary
information.
9. Attorneys' Fees: The prevailing party shall be
entitled to recover from the losing party its attorneys' fees and
costs incurred in any action brought to enforce any right arising
out of this Agreement.
10. Entire Agreement: This Agreement, along with the
applicable policies and benefits, as such may change from time to
time, constitutes the entire Agreement between Henderson and the
Company regarding their continuing employment relationship and
the termination of that relationship as a result of his
retirement.
11. Modification: This Agreement may only be modified or
amended by a supplemental written agreement signed by Henderson
and an authorized officer or representative of the Company.
IN AFFIRMATION AND ACCEPTANCE of the terms and conditions
set forth above, the parties execute this Continued Employment
and Voluntary Retirement Agreement as of the date below.
Dated: April 21, 1994 /s/ Thomas J. Henderson
THOMAS J. HENDERSON
Dated April 21, 1994 GUY F. ATKINSON COMPANY OF
CALIFORNIA
By: /s/ J. J. Agresti
Its: President
<PAGE>
Exhibit 10.7
RESIGNATION AGREEMENT AND GENERAL RELEASE
THIS AGREEMENT is made and entered into as of this 11th day of
May, 1994, by and between Guy F. Atkinson Company of California,
a corporation, together with its shareholders, agents, directors,
officers, employees, subsidiaries, successors, and assigns
hereinafter referred to collectively as "Employer" and Christine
V. Braunlich hereinafter referred to as "Braunlich", as follows:
RECITALS
WHEREAS Braunlich has been employed by Employer since July 29,
1985; and
WHEREAS Braunlich has served in various capacities for Employer,
including most recently as its Chief Financial Officer ("CFO");
WHEREAS Braunlich and Employer have mutually agreed that
Braunlich will resign as CFO;
WHEREAS Braunlich and Employer desire to memorialize the terms of
Braunlich's separation package from Employer, which constitutes a
good faith settlement of all claims or causes of action or
potential claims or causes of action by Braunlich against
Employer;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, it is agreed as follows:
1. Cessation of Employment
Braunlich shall agree to be CFO of the Employer until her
Resignation Date, defined as the earlier of thirty (30) days
following the effective date of this Agreement or upon receipt of
written notification from the Chief Executive Officer specifying
a date. Braunlich shall be relieved of all responsibilities of
CFO on her Resignation Date. Braunlich shall no longer be
required to report to Employer's offices following her
Resignation Date. However, Braunlich shall continue to be an
employee of Employer until her Separation Date, as hereinafter
defined, and shall endeavor to assist in the conduct of the
Employer's business until the Separation Date as may be
reasonably required by the Chief Executive Officer of the
Employer. Braunlich shall deliver to Employer all of Employer's
and its affiliates property in her custody or control on her
Resignation Date. For all purposes under this Agreement, the
term Separation Date shall mean the last date on which Braunlich
is entitled to earn salary continuation payments under this
Agreement.
2. Salary Continuation
During the period commencing with the day after her Resignation
Date, and continuing for a period of twelve (12) months
thereafter, Employer (or its successor if a merger occurs) shall
pay Braunlich her regular monthly salary in the amount of
$13,666.67, payable on the normal payroll dates in effect for the
Employer.
3. Employee Benefit Plans
a. Braunlich shall continue her participation in the
Employer's employee benefit plans, pursuant to the terms of the
plans and on the same basis as other executives, through the
employee's Separation Date. Notwithstanding the preceding
sentence, Braunlich shall not be eligible to continue her
coverage under any short-term or long-term disability plan of the
Employer after her Resignation Date. In the event of a merger,
sale of assets or other change in control as such events are
defined in Section 3.3 of the 1990 Executive Stock Plan,
Braunlich will receive the same protection of these benefit plans
as other executives.
b. Braunlich shall be permitted to participate in
Employer's 1990 Executive Stock Plan (the "Stock Plan") in
accordance with its terms through her Separation Date and her
Separation Date shall be the date of her termination of
employment for purposes of the Stock Plan and any options and/or
restricted stock granted pursuant thereto. Employer will give
Braunlich the same notifications regarding events of merger,
consolidation, etc., which it gives other executive participants
in the Plan.
c. Except as otherwise required by the terms of any
applicable benefit plans described in this section, Braunlich
shall be responsible for all income taxes applicable to the
compensation and benefits provided to her under this Agreement.
4. General Release
a. Except with respect to any rights Braunlich may have
under the Age Discrimination in Employment Act and except with
respect to the obligations created by, acknowledged, excepted
from, or arising out of this Agreement, Braunlich does hereby for
herself and her respective legal successors and assigns, release
and absolutely and forever discharge Employer from any and all
claims, demands, damages, debts, liabilities, accounts,
reckonings, obligations, costs, expenses, liens, actions and
causes of action of every kind and nature whatsoever, whether now
known or unknown, suspected or unsuspected, which she now has,
owns or holds or at any time heretofore ever had, owned, or held
or could, shall or may hereafter, have, own or hold, against the
Employer arising out of Braunlich's employment
with Employer, and termination of that employment (all of which
are collectively referred to in this Agreement as the "Released
Matters"). This release of claims shall not impair Braunlich's
right to be indemnified by Employer to the fullest extent
permitted by law as provided in Employer's Certificate of
Incorporation.
It is the intention of the parties in executing this
Agreement and in paying and receiving the consideration called
for by this Agreement, that this Agreement shall be effective as
a full and final accord in satisfaction and general release of
and from all Released Matters.
b. Section 1542
A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor
at the time of executing the release, which if known by
him must have materially affected his settlement with
the debtor.
It is the intention of Braunlich that this Agreement will
act as a bar to each and every claim, including such claims which
Braunlich does not know or suspect to exist. Braunlich
acknowledges that she may hereafter discover the existence of
additional claims or facts with respect to the subject matter of
this Agreement and which, if known or suspected at the time of
signing this Agreement, may have materially affected this
settlement. Braunlich expressly waives any and all rights and
benefits conferred upon Braunlich by the provisions of Section
1542 of the California Code or any comparable statutory
provisions, and expressly consents that this Agreement will be
given full force and effect according to each and all of its
express terms and provisions, including as well those related to
unknown and unsuspected claims, demands and causes, and demands
and causes of action described above.
c. Notwithstanding this general release, nothing contained
herein shall affect Braunlich's rights to vested benefits under
the Employer's 1987 Pension Plan, the Atkinson Retirement Stock &
Investment Plan, the 1990 Executive Stock Plan or medical
insurance continuation rights under COBRA following her
Separation Date.
5. Braunlich's Cooperation; Employer's Cooperation
a. Braunlich agrees to cooperate with the Employer
regarding any pending or subsequently filed litigation, claims or
other disputed items involving the Employer that relate to
matters within the knowledge or responsibility of Braunlich
during her employment. Without limiting the foregoing, Braunlich
agrees (i) to meet with Employer's
representatives, its counsel or other designees at mutually
convenient times and places with respect to any items within the
scope of this provision; (ii) to provide truthful testimony
regarding same to any court, agency or other
adjudicatory body, and (iii) to provide the Employer with notice
of contact by any adverse party and further agreed that she will
not assist any such adverse party's representatives except as may
be required by law. Employer will reimburse Braunlich for all
reasonable expenses, including any lost wages at Braunlich's then
current rate for time spent in connection with the cooperation
described in this paragraph.
b. Braunlich agrees not to use or disclose to any third
party any confidential or proprietary information pertaining to
the businesses, processes or systems of Employer without the
prior written consent of Employer. Braunlich and the Employer
agree that each of them shall refrain from: (i) making any
critical or derogatory public statements concerning Braunlich or
the Employer and/or its officers, directors or employees; or (ii)
knowingly taking any other action which would materially
adversely affect either Braunlich's or the Employer's reputation
or business prospects. Employer agrees that it shall not be
deemed to be a breach of Braunlich's obligations pursuant to (i)
of this paragraph if Braunlich responds to questions regarding
Employer, its officers, directors or employees by stating:
"It is my policy not to respond to questions regarding
my former employer."
c. Braunlich agrees to be available for consultation as
needed through her Separation Date.
6. Employer Cooperation
In the event Employer receives requests for references regarding
Braunlich's employment, Employer agrees to say substantially that
Braunlich performed her job well and in a very professional
manner. Braunlich agrees to direct such requests to Employer's
Chief Administrative Officer.
7. Breach
At any time after the effective date of this Agreement, if
Braunlich or the Employer breach any of the covenants contained
in this Agreement, then, in such event, Employer and Braunlich
shall have the rights and remedies at law or equity. If
Braunlich breaches the Agreement, the Employer shall have the
right to immediately terminate any further payments and
compensation or benefits set forth in this Agreement.
Employer shall give written notice to Braunlich of the
circumstances giving rise to any alleged breach of this Agreement
at or prior to terminating such payments.
In the event of Employer's breach of this Agreement including but
not limited to wrongful failure to make the payments described
herein, then, in addition to all of Braunlich's rights and
remedies at law and equity, Braunlich shall have no obligations
under Section 5a(i), (ii) and (iii) as well as Section 5b (i) and
5b (ii) to the extent that 5b (ii) refers to litigation which
might be brought by Braunlich against Employer for breach of this
agreement. Provided, however, that Braunlich's obligation not to
use or disclose to any third party any confidential or
proprietary information pertaining to the businesses, processes
or systems of Employer, shall remain in effect.
8. Non-Admission
This Agreement shall not be construed as an admission of guilt or
liability on the part of the Employer under any federal, state or
local law, whether statutory or common law nor shall it be deemed
or construed to be any failure of performance or wrong doing on
the part of Braunlich.
9. Disclosure
Employer agrees that it will characterize Braunlich's departure
as set forth in the attached announcement and will so instruct
its officers.
10. Entire Agreement/Legality
Both parties agree that this Agreement supersedes any prior
agreements or representations between the parties, oral or
otherwise, pertaining to the subject matter of this Agreement,
and that all such prior agreements are null and void with the
exception of the 1990 Executive Stock Plan and any amendments
thereto. No representations, obligations, understandings, or
agreements, oral or otherwise, exist between the parties except
as expressly stated in the Agreement. This Agreement may be
amended or terminated only by a written document signed by the
Chief Executive Officer of Employer and Braunlich.
11. Attorneys' Fees:
The prevailing party shall be entitled to recover from the losing
party its attorneys' fees and costs incurred in any lawsuit or
other action brought to enforce any right arising out of this
Agreement.
12. Successors:
This Agreement shall be binding upon, inure to the benefit of and
be enforceable by the Employer and Braunlich and their respective
heirs, legal representatives, successors and assigns. The
Employer shall cause any successor or assignees, whether direct
or indirect, by purchase, merger, consolidation or otherwise, to
all or substantially all of the business or assets of the
Employer, expressly and unconditionally to assume and agree to
perform the Employer's obligations under this Agreement. In such
event, the term "Employer" as used in this Agreement, shall mean
the Employer as previously defined and any successor or assignee
to the business or assets which by reason hereof becomes bound by
the terms and provisions of this Agreement.
This Agreement shall inure to the benefit of and be enforceable
by Braunlich's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees. If Braunlich dies before all of the benefits and
payments provided herein have been paid to Braunlich, all such
unpaid amounts shall be paid in accordance with the terms of this
Agreement to the Employee's beneficiary, successor, devisee,
legatee or other designee or, if there is no designee, to
Braunlich's estate.
11. Severability
If any portion or term of this Agreement is found to be invalid
by any court, agency or other competent authority, the remaining
lawful terms will remain in full force and effect, provided
however, that if the release provisions in this Agreement are not
fully enforced as a bar to any claim made by Braunlich against
the Employer, then the monies received by Braunlich under this
Agreement will be returned to the Employer.
12. State Law Governs
The Agreement will be governed by and construed according to the
Laws of the State of California.
13. Consultation With Attorney
Braunlich has consulted with an attorney of her choice prior to
executing this Agreement. Braunlich further acknowledges that
after consideration of this Agreement and offer of compensation
made to her by Employer, she has signed this Agreement as a
voluntary act without coercion or force of any kind whatsoever.
ACCEPTED BY BRAUNLICH:
/s/ Chris Braunlich May 18, 1994
Date
ACCEPTED BY EMPLOYER:
By /s/ James D. Stevens May 18, 1994
Date
<PAGE>
ANNOUNCEMENT
Chris Braunlich has given notice that she would like to leave the
Company. Chris informed us that she feels she has accomplished
the goals she set for herself when she came to Atkinson in 1985
and intends now to pursue new opportunities and challenges
outside the Company. Chris has graciously agreed to stay with us
for a reasonable time to assist in the transition. She has also
agreed to remain available to Atkinson to consult as needed over
the next 12 months. We will miss Chris and wish her well in her
future endeavors.
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
Organized
Under
Corporate Subsidiaries Laws of
Guy F. Atkinson Company Nevada
Atkinson Building Company California
Guy F. Atkinson Company - Overseas Delaware
Guy F. Atkinson Construction Ltd. California
Atkinson Development Company California
Atkinson-International Venezuela, Inc. California
Atkinson Land Company California
Atkinson Middle East, Inc. Nevada
Atkinson Realty, Incorporated California
Atkinson Resources, Inc. California
Atkinson Venezuela, Inc. Delaware
Andrew H. Charles Corporation Delaware
Commonwealth Water Solutions, Inc. California
DWA Fed Oak Inc. California
Offshore Hydro Services, Inc. California
J. E. Record, Inc. Delaware
WBL Solar Corporation California
Walsh-Puerto Rico, Inc. California
Wismer & Becker Contracting Engineers, California
d/b/a Atkinson Mechanical Contractors Co.
Colma Casualty Company Vermont
Tyger Construction Company Incorporated South Carolina
Guy F. Atkinson Holdings Ltd. Canada
Commonwealth Asia Constructors Ltd. Canada
Commonwealth Asia Pacific Constructors Pte Singapore
Commonwealth Construction Company (1985)
Limited Canada
Commonwealth Pacific Consultants Ltd. Canada
Hume & Rumble Limited Canada
Mathias & Nichol Installations Ltd. Canada
Western Flange Manufacturing Ltd. Canada
Alliance Valve Corporation Ltd. Canada
Comco Pipe & Supply Ltd. (name changed to
285878 B.C. Ltd.) Canada
Les Entreprises Atkinson du Quebec, Inc. Canada
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS;
I, the undersigned, do hereby make, constitute and
appoint Therese Ambrusko and Herbert D. Montgomery, or either of
them, my attorney-in-fact for me and in my name, place and stead
to execute for me and on my behalf in each of my offices and
capacities with Guy F. Atkinson Company of California, Annual
Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934, on Form 10-K, with respect to fiscal year ended
December 31, 1994, together with any amendments thereto on Form
8K, said report to be filed with the Securities and Exchange
Commission in Washington, D.C., 20549, on or before March 31,
1995, approving and confirming all that said attorneys-in-fact
may do by virtue of these presents.
IN WITNESS WHEREOF, I have executed these presents this
16th day of February, 1995.
/s/ Ray N. Atkinson
WITNESS:
/s/ J. J. Agresti
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS;
I, the undersigned, do hereby make, constitute and
appoint Therese Ambrusko and Herbert D. Montgomery, or either of
them, my attorney-in-fact for me and in my name, place and stead
to execute for me and on my behalf in each of my offices and
capacities with Guy F. Atkinson Company of California, Annual
Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934, on Form 10-K, with respect to fiscal year ended
December 31, 1994, together with any amendments thereto on Form
8K, said report to be filed with the Securities and Exchange
Commission in Washington, D.C., 20549, on or before March 31,
1995, approving and confirming all that said attorneys-in-fact
may do by virtue of these presents.
IN WITNESS WHEREOF, I have executed these presents this
16th day of February, 1995.
/s/ Wm. E. Burch
WITNESS:
/s/ J. J. Agresti
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS;
I, the undersigned, do hereby make, constitute and
appoint Therese Ambrusko and Herbert D. Montgomery, or either of
them, my attorney-in-fact for me and in my name, place and stead
to execute for me and on my behalf in each of my offices and
capacities with Guy F. Atkinson Company of California, Annual
Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934, on Form 10-K, with respect to fiscal year ended
December 31, 1994, together with any amendments thereto on Form
8K, said report to be filed with the Securities and Exchange
Commission in Washington, D.C., 20549, on or before March 31,
1995, approving and confirming all that said attorneys-in-fact
may do by virtue of these presents.
IN WITNESS WHEREOF, I have executed these presents this
16th day of February, 1995.
/s/ J. Phillip Frazier
WITNESS:
/s/ J. J. Agresti
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS;
I, the undersigned, do hereby make, constitute and
appoint Therese Ambrusko and Herbert D. Montgomery, or either of
them, my attorney-in-fact for me and in my name, place and stead
to execute for me and on my behalf in each of my offices and
capacities with Guy F. Atkinson Company of California, Annual
Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934, on Form 10-K, with respect to fiscal year ended
December 31, 1994, together with any amendments thereto on Form
8K, said report to be filed with the Securities and Exchange
Commission in Washington, D.C., 20549, on or before March 31,
1995, approving and confirming all that said attorneys-in-fact
may do by virtue of these presents.
IN WITNESS WHEREOF, I have executed these presents this
16th day of February, 1995.
/s/ D. R. Kayser
WITNESS:
/s/ J. J. Agresti
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS;
I, the undersigned, do hereby make, constitute and
appoint Therese Ambrusko and Herbert D. Montgomery, or either of
them, my attorney-in-fact for me and in my name, place and stead
to execute for me and on my behalf in each of my offices and
capacities with Guy F. Atkinson Company of California, Annual
Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934, on Form 10-K, with respect to fiscal year ended
December 31, 1994, together with any amendments thereto on Form
8K, said report to be filed with the Securities and Exchange
Commission in Washington, D.C., 20549, on or before March 31,
1995, approving and confirming all that said attorneys-in-fact
may do by virtue of these presents.
IN WITNESS WHEREOF, I have executed these presents this
16th day of February, 1995.
/s/ John F. Whitsett
WITNESS:
/s/ J. J. Agresti
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS;
I, the undersigned, do hereby make, constitute and
appoint Therese Ambrusko and Herbert D. Montgomery, or either of
them, my attorney-in-fact for me and in my name, place and stead
to execute for me and on my behalf in each of my offices and
capacities with Guy F. Atkinson Company of California, Annual
Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934, on Form 10-K, with respect to fiscal year ended
December 31, 1994, together with any amendments thereto on Form
8K, said report to be filed with the Securities and Exchange
Commission in Washington, D.C., 20549, on or before March 31,
1995, approving and confirming all that said attorneys-in-fact
may do by virtue of these presents.
IN WITNESS WHEREOF, I have executed these presents this
16th day of February, 1995.
/s/ R. J. Turner
WITNESS:
/s/ J. J. Agresti
